All Forum Posts by: Joshua T.

 

@Anthony Thompson maybe you can answer this. I see some multifamily houses advertised where the seller specifically states they will not accept FHA loan financing. Why is that?

@Brandon Wong You pointed out that the buyers are taking a large amount of debt to achieve a little return. However, the ability to leverage large quantities of cash is exactly why so many choose to invest in real estate. A teacher who make $50,000 a year could never get a $100,000 loan to buy stocks or bonds. However, our system will happily throw him $100,000 at 3% interest rate to buy a house. So he only makes $100-200 dollars a month on that house. With the taxes breaks he enjoys, the appreciation he will probably experience, inflation protection, and eventual rise in rents; our teacher can probably bring in $10,000 - $50,000 from his investment in 5 years. If he refinanced his house and got cash out, he can use leverage to buy another property.

In short, no other asset class comes with so much easy leverage. A teacher is handed hundreds-of-thousands of dollars without needing to

prove anything to a bank beyond credit score and sufficient income.

@Anthony Thompson Thanks Anthony!

@Lindsey Costello No worries. I am still new like you, so take it with a grain of salt. Also, I am local to the Providence area. I had planned on attending the local RIREIG meeting before Covid-19. Lets stay connected.

Anthony Thompson always has wise advice. Lindsey, I'm looking to house hack just like you and would be house shopping if it weren't for the pandemic. I'd wait and see what the housing market looks like after stay-at-home restrictions are lifted. We may see a series of foreclosures and short sales that drastically shifts values in certain areas. Don't try to grab the proverbial falling knife until it has actually hit the floor. Good luck!

@James Campbell  I understand. Thanks for the clarification!

Isn't mortgage interest from HELOCs no longer tax deductible? My understanding is second mortgages are more desirable from a tax efficiency standpoint.

Yes or I will be. The relative will be the designated representative in Florida. I have NOT formed the LLC yet and was kicking around the idea of making them a manager too. However, I would like to file my taxes under schedule C and didn't know if having a non-member manager would complicate things. If the delegation is sufficient, I prefer to go that route.

I am looking to form an LLC in Florida for my new real estate business. I do not live in the State, but I have a close family member who does. Since my job requires me to travel often, I would like this person to be able to make purchases and sales on behalf of my LLC. I read that a good option is setting up a delegation of authority. However, I have no idea if this is valid. Anyone in Bigger Pockets land have more experience with delegations of authority? Do you need a lawyer to set one up? Will banks and title companies recognize it?