All Forum Posts by: Joshua Gordon

@Natalie Kolodij Good questions. The funds needed to cover total annual expenses for the first property would be set aside from the lump sum payment. The remaining profits would be toward a down payment on the second property.

@Angelica M Garzon Good point. I would definitely draft a stipulation covering that risk in the lease.

@Blaine B. From my understanding, I’m profiting 10% less annually than I otherwise would and therefore taxes would be less. However, I’d need to go over this with a tax expert to know for sure.

@Ola Dantis I’m not too worried about what Joe brought up as our lease agreement would take that into account eliminating any possible issue. To your second point, if you take another look at what I wrote originally I mentioned that I’m using the Profits to acquire another property - that’s after setting aside the capital necessary to service the mortgage.

@Luke Saglimbeni Yeah that’s what I’m leaning towards doing. My logic is that the 10% hit will be worth being able to acquire a new property that is also cash flow positive. That said, I need to think about it some more before I go through with it.

@Jason Turgeon Thanks for the reply, you bring up some good points. To answer your questions, yes I am netting sufficiently above ten percent so I don’t have an issue in that regard. As far as taxes goes, I don’t see why it would be any different. If anything, I’m netting less than I otherwise would so I’d expect to pay less. That said, I need to look more into that.

So...

1) Given that I am netting 30% before discount and

2) that I can acquire another property that nets similar gains only if I take the offer and

3) assuming that taxes are not an issue...

What would you do in my situation?

My stellar tenant of two years plans on renewing his lease this month. He called me today to ask if he could pay a full year’s rent in advance for a ten percent discount. I told him I’d have to think about it and get back to him. As of right now, I’m leaning towards taking his offer. I plan on using the immediate profits towards a down payment on a new property.

Curious to hear what you guys would do in my situation?