All Forum Posts by: Khang Nguyen

All of the renovations you performed prior to putting your property into service should be capitalized .... it matters not that the property was in-service under the prior owner, you took vacant possession and renovated prior to returning it to service.

Additionally, much/most of the work performed during a substantial renovation is considered a capital expenditure, not an expense.

Hi Roy,

Appreciate the response. I think the key part I want to clarify is that the existing tenant was still under a rental contract for 2 days after we closed on the house. I'm not sure if those 2 days would constitute being "in service". What if we had kept the tenant under contract for an additional 1-6 months?

In regards to the substantial renovation bit, and assuming we could qualify SOME of the renovations as expenses, are there guidelines on what renovations what would qualify as an expenses vs capital expenditures?

I do plan on working with a CPA on this, but definitely wanted to get BP insight as well.

Thanks!

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Hi BP,

First time I will be filing taxes with a CPA, so I'm looking for recommendations for a local CPA/accountant who specializes in real estate.

Thanks!

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Raleigh, North Carolina

Hi BP,

I purchased a property this past year that had an existing tenant that was month-to-month. As part of the purchase agreement, the tenant's lease agreement ended 2 days after our closing date. After the tenant moved out, the property underwent major renovations, and the plan is to put the property back up for rent in the next few weeks.

My question is, as part of the BARRR strategy (buy, advertise, rehab, rent, refinance), since the house was already technically rented out, can I deduct all rehab expenses even if I didn't re-advertise the property as available for rent?

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Hi Giak,

I'm in a similar situation you were in when you posted this. How did this end up working out for you?

Originally posted by @Giak Tran:

@Matt Fish, I'm very much in the same situation as yours. I have a hard time to find a company to do the work in PG county MD. After 20+ calls, I finally found one that quotes me below. I don't have another quote to compare with so still sitting on it. Another reason I have not made the decision is it takes 10-20 months to complete. I plan to sell the house with 1/2 of the land within a year. I have a difficult to find out how I can sell the house while the subdivision is pending. I talked to many real estate agents (I understand not all of them are create equal), several reals estate attorneys (they're either not familiar or don't want to do), but still, don't know if this is possible and how.

Here is the breakdown of the works:

1) Boundary Survey of 1.1 Acres per Deed Price: $1050.00
(Boundary Drawing is included)
(Title Report is required to be supplied at Client’s cost – approximately $150 - $200 by others).

2) Stakeout Property corners..
Add: $525

3) Topo for subdivision

Add:$700.00

4) Feasibility study and preliminary plat for subdivision:

Add:$800.00

5) [Optional only after 4 above] - Subdivision plat with all county requirements addressed:

(PERCOLATION TEST or PUBLIC SEWER will need to be addressed after Feasibility study has been made)

Add: $7500.00

6) Add: drawing of existing improvements (House etc)
Add $175

7) Paper Copies
Add: $35.00
Autocad drawing
Add: $35.00

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Hi Harjeet,

I had spoken to a lender and was told that since it's not my primary residence, it would not qualify for HELOC.

Perhaps I need to speak with a few different lenders.

Originally posted by @Harjeet Bhatti:

You have ownership so can get HELOC on your name.

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Hi BP,

I have a pretty unique situation. I have a relative who purchased a primary home in cash and also put my name on the title/deed. She does not have the income/DTI to leverage a HELOC on the property herself, but gave me permission to seek a way to leverage the property for financing myself.

Are there any avenues where I can leverage this home to obtain capital?

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Congrats Shaun!

Not sure if this has been asked yet, but do you have an estimate of what it would have cost if you had contracted out the renovations instead? Your numbers + cashflow on this look great, but how would it have been impacted had you paid for contractors?

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All Forum Posts by: Khang Nguyen

Khang Nguyen has started 3 posts and replied 10 times.

Post: Raleigh/Durham & Surrounding Areas Meetup

Post: Raleigh/Durham & Surrounding Areas Meetup

Post: The "A" in BARRR strategy with existing tenant

Post: The "A" in BARRR strategy with existing tenant

Post: Recommendations for local CPA

Post: The "A" in BARRR strategy with existing tenant

Post: Blown Away by the Cost to Subdivide $$$$$

Post: HELOCS/etc on non-investment non-primary residence property

Post: HELOCS/etc on non-investment non-primary residence property

Post: My first deal... finally