All Forum Posts by: Lauren Keen Aumond

Update as an FYI: He said the information is not on the IRS website and is IRC 469, so he will not take the deduction and in fact will not file my taxes if I want to take the deduction.

What a waste of the $225 I now have to pay him. I could have done this myself! As a matter of fact, I did my taxes on Turbo Tax before I even gave them to him. Lesson learned!

Blake, does your significant other qualify for a mortgage?

Thank you all for your detailed responses. What I'm hearing is that the Real Estate Professional designation is not directly related to what deductions a real estate investor could or could not take.

It seems I do meet the requirements. Even taking depreciation into account, my rental made a profit AND I'm actively looking for another one. I analyze deals, read books, learn from the forums, network, visit properties on a weekly if not daily basis.

I will do as suggested and ask him to show me where the real estate professional designation is necessary. 

I'm using a CPA for the first time since 2017 was my first year having a rental property. He's my parents' CPA and they have one rental. He told me I can't take any home office deduction (I'm interested in the "simplified one" $5/sf) because I'm not a Real Estate Professional (750 hours spent or half my regular business time). In Amanda and Matt's book, Tax Strategies for the Savvy Real Estate Investor, they say if your home office is "your primary place of business" for real estate activities, then you can deduct it. This is definitely true for me, however, I can't find if Amanda and Matt mention the Real Estate Professional definition as a requirement for that or not.

If I can take the deduction, can you send me some collateral I can forward to my CPA? 

(And I already know I need to find a different CPA because I came with more ideas than he did. This is a DIFFERENT discussion.)

For my single family home rental, I have in my lease that I will pay water bill up to $100. Once you get the separate meters (if you can), that would be something for you to consider. Not sure if there's a way to institute a cap when there are multiple units.

Hi Randolph, as for your first question, if you buy multiple units (2-4), you can live in one and rent out the other units. This is referred to as a house hack. I would definitely recommend doing that. When I bought my second house, I rented out the first one and I'm glad I did.

I don't have a good answer to your second question, although I have heard doing 20% conventional is a good idea IF you can get approved and come up with the down payment. That's what I'm working on for my second rental. If you hold rental properties in an LLC, if you end up with 10, or if there are 5+ units in the building, you can't get a 20% conventional anymore, hence the reasoning to do it while you can.

I'm sure you'll get more knowledge out of more seasoned investors than me soon!

Thanks, @Corina Eufinger. The property is technically a duplex in the county's eyes, so renting both is fine. Really appreciate your input!

Hi everyone. My boyfriend is looking into buying a house (currently 2/2/2, easily converts to a 3/2/2) that has a 2/1 garage apartment. When doing analysis, should we assume rents separately and add them together? What I mean is this: do we look for 2/1 apartment comps and 3/2/2 house comps and add them together? Being new to REI, my concern is that the same people that would rent a 3/2/2 SFH are not the same that would be comfortable living with another tenant on the property and maybe we should assume the house's rent would be lower. On the flip side, maybe the apartment would rent for more than a typical apartment because of relatively fewer neighbors.

*I searched BP for another string with this topic and couldn't find it. If you know of one, please post the link for me. I'd prefer not to create double work for you if you've answered this question elsewhere.

Thanks!

Quick update: I told them I'd allow the 60-day notice to break the lease with half a month's rent as a fee ($750). They agreed and I'm going to the house on Sunday to do an inspection and sign the addendum. Thanks for your help, everyone!

Two other things to note about LLC's: 1) If you transfer a mortgaged property to an LLC from your own name, the bank could call the note due (unlikely, but could happen). 2) Some loans (like a 20% conventional) are not options under an LLC.

Correct me if I'm wrong, oh wise ones.