All Forum Posts by: Steve LeBlanc

Well you just made this next level difficult.  Never heard of these interest tracing rules, but it makes sense.

The new loan balance will NOT be the same.  The current balance on the 5 existing mortgages is $600,000.  The new loan balance will be $750,000.  The purpose of the loan is to do a cash out as I'm leveraging the equity for another business venture.

I typically do my own taxes.  The new balance will be higher and the extra $150,000 not being used for Schedule E investment real estate, but rather for business startup costs and operating expenses.  My research shows me that only $5000 of business start up costs are deductible, up to a certain amount of expenses.  Therefore, how would one go about interest tracing the $600,000 amount against the 5 properties. Sounds like a fun math problem. 

I'm in the process of combining 5 of my investment properties (currently individually mortgaged) into a portfolio loan.  Is the interest paid on this new portfolio loan deductible just the same as the mortgage interest on the conventional loans?

@Tara Croskey they got what they deserved, for the most part. Both ended up in federal prison as a result of their cons and theft

@Tim Fazio thanks for the suggestion. Ill reach out to you for some additional cost details.

@Stephen Mackivitch not just yet. In the middle of a move. I am in comms with a lender that loans against the numbers of the property being financed. It has to be purchased within an LLC with this lender.

Ahh yes, I kind of forgot about CoreVest. I had a $2M LOC with them last year but never acted on it unfortunately. CoreVest left a bit to be desired on their costs for residential products.

Would you mind sharing the cost and terms? I'm curious what the lending fees were, and the term and rate of the loan?  Would be interesting to see the difference between comm and residential. 

Stephen, this has been a consideration, but, it's really hard to give up 3.5% to 5% interest rates that I have on the existing mortgages.  Indeed, it would resolve the issue of having the 10 mortgages, but the overall cost I think is a bit prohibitive.

Alas, I did come across a company called LendingOne. You don't have to have W2 income. But you do have to have capital and assets, you have to get the loan in an LLC, and you have to investor experience. The lending fee is a bit high at $2500, but you can get a 30 year term at about 4.5% to 5.5% depending on if you do a purchase or a delayed financing product.

Thank you to the others for your inputs and suggestions.  

@Wenda Wang

I was not aware of this. I’ll research. Thank you.