All Forum Posts by: Justin Fox

I mean, by definition you shared in the spoils by hiring him.  He just needs to adjust his price/sqft for doing more than a typical contractor does.  $15/sqft under roof instead of $10, for instance.  We build cost plus, so our fee is set and the client/owner is responsible for the labor/material costs during the build whether they end up being lower, higher or right at the estimate/bid price for the bank.

This is really up to him to do.  He can either up his price to what he thinks he's worth or keep feeling underpaid and bitter.

I would just give him the prorated rent and the deposit refund once he's all packed up in the U-Haul and the keys are in your hand.  Just put it back on the market available 02/01/2022 and ask him to keep it tidy.  It should be in your lease that you have right to show the property with proper notice, whatever that is legally in TN.

Unless he needs her income to qualify, no.  He should probably tell her to get her own place and not leave her toothbrush either or at least have her sign a lease agreement.  Added bonus is even if they do get married, if the house was bought by him solely prior to a marriage, the house won't be considered community property in Texas.

Tell her it's because she's a terrible person and if you renew, other tenants are threatening to leave, which will cost you more money than she's worth.  At the end of the response tell her to have a blessed day haha.  But seriously, If she refuses to pay send her notice to vacate after non payment.  If she then refuses to leave, start the eviction process (do everything by the book).  If she thinks it's unfair being asked to leave because she's bad for business, just wait until she has an eviction on her record.

Typically you ask for any vehicle notes on an application.  I mean, inquire about their monthly payments on the revolving credit.  If the rent plus their other debts and est. utilities would have them struggling (in your opinion), then I'd pass.  I'd rather it inconvenience the living arrangements of the tenant that's spending outside of their means, than it end up being a financial inconvenience for me.  If you deny them based on credit report findings, be sure to provide an Adverse Action Notice.

Hell, when I get mortgages or refinances they run credit, ask for all forms of income, ask for my all bank statements, all investment account info, all properties with their lien information (if they're leveraged) and estimated values.  If they complain about prying eyes (or call you a fascist lol), tell them they're free to reside elsewhere.

Also, I'd tell you in a heart beat that they were the best tenants ever if it meant getting a headache out of my life.  So take that with a grain of salt.  

Nope, never.  I don't need their money upfront, I need their income to qualify upfront.  They can stick their money in a savings account and drawn on it monthly same as I would be required to do.  I have a process that I use and criteria I don't deviate from.  I have the ability to keep my properties vacant for years.  I'd prefer that over emotionally miscalculating, and then potentially having horrid tenants occupying my mental space at night.

@Corbett Brasington

You'll soon come to understand that you're building/renovating homes for appraisers, not buyers.  Buyers get the upgrades and features in a home that an area's appraisers feel they are entitled to.  Now I'm not saying that above-average finishes don't attract more buyers to sign on the dotted line, but unless the appraiser notices that quality, the buyer will still need to bring $$ to closing.  Every house I've sold I've had a stipulation in the contract that I get the buyer's appraisal at closing.  I want to know over time what appraisers value and what they don't.

Found this on investopedia:

• Depreciation recaptures on gains specific to real estate property are capped at a maximum of 25% for 2019.

For example, consider a rental property that was purchased for $275,000 and has an annual depreciation of $10,000 ($275,000 / 27.5 years allowed by IRS for rental property). After 11 years, the owner decides to sell the property for $430,000. The adjusted cost basis then is $275,000 - ($10,000 x 11) = $165,000. The realized gain on the sale will be $430,000 - $165,000 = $265,000. The unrecaptured section 1250 gain can be calculated as $10,000 x 11 = $110,000, and the capital gain on the property is $265,000 - ($10,000 x 11) = $155,000.

Let’s assume a 15% capital gains tax and that the owner falls in the 32% income tax bracket for 2019. Unrecaptured section 1250 gains are limited to 25% for 2019. The total amount of tax that the taxpayer will owe on the sale of this rental property is (0.15 x $155,000) + (0.25 x $110,000) = $23,250 + $27,500 = $50,750. The depreciation recapture amount is, thus, $27,500.

You need to get with an estate lawyer like @Dale Degagne suggested and make sure you get a title policy on the duplex if you take it over, and get everything right and filed with the county/city.  You don't want any shoddy quick-claim deeds or other mess-ups keeping you from being able to sell and having to fill out mountains of paper work (affidavit of heirship and etc), and having to coordinate with siblings again.

$370.00 isn't much meat on the bones for a rental after PITI deducted only. If you can sell without a realtor and no seller concessions, go for it. I'm not sure how much the taxes are but if you pay ~5,000 in title, taxes and buyer warranty, and can walk with ~49,000.00 at closing, that's a no brainer.