All Forum Posts by: Greg Rusianoff

What is the difference between Homeowners Insurance and Umbrella? I own 5 SFRs through an LLC. They are all in one LLC. I am concerned, because one of them is not up to code, and it will take some time for me to get it up to code. However, there is someone living in it.

How do I best protect myself? From what I understand, homeowner insurance won't insure a house until it is up to code. Would umbrella insurance protect me up to a point?

How much would a typical policy cost to insure 5 properties valued at a combined 300k (Approximately). 

 Thanks W.J. Suppose I write a mortgage. How would I market/sell this mortgage?

Gotto start somewhere. Risking only $500 for a  piece of land is not a bad way to get experience. My first experience (a bad one) was a $4,200 trailer but I learned a lot from it. 

I recommend finding a real estate lawyer to work with. If you have one you could get thru family/friends connections, that's probably the way to go. For most RE lawyers, not worth their time if they don't think you're gonna be a consistent client with lots of money.

I recently tried to take a mortgage out on a condo that I own free and clear. The bank did not allow it because 28 of 40 units in the condo association were rented out and not owner occupied (I rent mine out as well). So now I'm in a dilemma. I want to take money out of this property, but I don't want to sell the property. Does anyone know any creative ways to get a loan backed by this property?

It's a 2Bed/2Br, 1000sf condo, worth about 80k in my estimation. I'd like to take 50k out. 

In my state, tax lien redemption is 1 year. 

If the property redeems in 1 year, and you get your money back and interest in longer than 1 year, can I treat the interest as a Long Term Capital gain?

Also, if I get the deed to the property, and not the interest, after 1 year. If I flip that property 1 month after the expiration of the redemption period, does the gain count as long term or short term? It would make sense that it is long-term, since I committed my money 13 months before getting the payoff - the money on the flip...

Looks decent on google maps. For $500 you can't really go wrong. What's the most you can lose? You get a house for cheaper than a month of rent for most people. Granted the rehab costs may make further investment unattractive, but I bet you can flip it for $1000 or more. If you bought OTC does it mean you still have to wait 2 years?

 Hey Michael,

I went to both Beaufort and Dorchester sales. I would advise to stay away from the Beaufort lots that look too good to be true. Many of them are in closed golf communities like Berkeley Hall or Belfair Plantation. If you get the tax deed, you will be charged with a mandatory initiation fee of 15,000-20,000 and $700 per month mandatory golf club membership. I'm not joking. I know a guy who picked up 3 of these lots for $6,000 and now the golf community has sued him for $150,000 in fees. Read these articles:

http://www.islandpacket.com/news/local/community/b...

http://www.wsj.com/articles/SB10001424052702303703...

I like the small sales like Dorchester and Berkeley. Berkeley is coming up next week. Found this website that has a really good map of all the properties: www.underadar.net

 Technically it's short-term capital gains, that are treated as ordinary income. If you wait, for a year, then it's treated as long term capital gains, which are taxed at a lower rate.

If you actively manage your real estate business, then it's self-employment income. If you're a passive investor, then it's investment income and you do not owe self-employment taxes. 

Rental income and flipping is treated just like stock dividends and capital gains (in terms of investment income), unless you're the active manager.

I think cap rate refers to the market values of the property and a way of comparing one geographic area vs. another . IE cap rates in New York are much lower than cap rates in Atlanta.

But your calculation is pretty much yield - You could do the same for any fixed income investment. Seems like a decent way to evaluate an investment. If you can get a loan at less than that yield, you should be good.