All Forum Posts by: Justin Fox

It all depends on what your debt to income ratio is.  The bank I used recently only requires a rental be in service for one year before it is considered as part of your income.  Some banks may require longer, not sure.

I currently have two mortgages and was pre-approved for another.

Justin

Okay, awesome.  Thank you for the reply!  I will definitely give that book a read.  I did a cash out refinance this year on the same property.  From what I'm reading, I can apply that title fee towards the total cost basis of the home.  So it will be (91,600 + 1131) / 27.5.  I know on the tax role the county's fair market value was ~103,000 in 2014.  I think I'm required to use the lower of the two, though : (.

I just want to make sure that when I do my taxes this year that I'm getting the most out of my depreciation while staying legit.

Thanks again,

Justin

Hello Chris,

I would take 20k and keep it on the side for fun, and use the rest to put down payments on a few rentals.

Justin

Is there any additional PMI for only putting 2,500 down? Do you have enough money for a 3-6 month vacancy fund? Have you calculated in 1-3% (of purchase price) annually for repairs? I'm not saying it's not going to make money, just make sure you're looking at all the numbers.

Justin

No bank is going to lend cash based on only ~40k equity.  I wanted to cash out the equity of my home for 75,000 and every lender was telling me no.  I had to bump it up to 89,000 or higher to get the loan.

Another problem is, you'd pay closing on the equity cash out and both of the properties' mortgages (A and B).  If the money isn't going to principal or in your pocket, it's interest.  Now I will say that if you have 100% equity in a home, a cash out refinance is the best "construction" loan you can get.  Depending on the construction costs in your area of course.

That's the problem with home loans though, you're not making 'quick' equity.  You're building equity, but very slowly.

Real estate investing will teach you patience, that's for sure. If that duplex is looking like it will make money, purchase it and rent it out.  Keep your day job and save for down payments.

I have a single family home that I refinanced in 2010 and paid off completely in July of 2013.  The home is now a rental property, and has been since 09/01/2014.  I didn't take the depreciation deduction on my 2014 return (there was no designated area to do so using the H&R block tool).  I have documentation reporting the principle and interested paid total.  I also have the Title Fees from the original refinance in 2010.

We built the home in question, so the land was given to us.  The loan was a construction loan.  Since the loan funds were strictly spent on the construction, would that mean the land value would play no part in my depreciation calculation?

So, would the cost basis for the home be the ((principle paid + interest paid + original title fees) / 27.5)?

Thanks for any help and I'm sorry if any of this information is hard to follow,

Justin