All Forum Posts by: Michael P.

Chad,

Yes, if you build a new home and then sell it for less than you built it for you will have a loss.  So Yes, some of the equity will evaporate.  

It's wise if you want to live on the specific type of property you mention.  Quality of life has more benefits then just a $ number associated with equity in your home.  

Good Luck

For those of you who have conducted a Cost Segregation Study, what percentage did it allow you to depreciate?

Please also state what type of property you have.

For example, Single Family, Duplex, Townhouse, etc.  

I'm trying to get a ballpark % I could depreciate if I were to purchase existing or build new residential properties.  

Thank You!

@Account Closed sounds good, thanks.  

@Account Closed yes I develop in DFW, mainly Dallas.  

@Account Closed I have never done it so I am not well versed on the subject and frankly not a huge fan of it as I think the original owner can get screwed over.  I guess if you told him what you were doing and he agreed it would be all alright, otherwise I don't like it.  

Regardless of my feelings on the subject you can do it, yes I would still get an LLC, yes, I would hire a lawyer.

@Bob Fox so she wants to represent you on the buy side and charge you an additional fee of $295?  

Initially I was going to advise you to find another agent but I think we need more information.  Are you purchasing extremely low end properties?  If so maybe this is justified as her commission could be peanuts.  If you are buying anything north of 100k this is silly and I would fire her on principal reasons alone.  All the reasons listed above are why she gets her 3% buyer's agent commission.

@Account Closed So you are trying to do a wrap?

@Account Closed are you the seller who is offering to be the bank or are you the buyer?

If you are the seller, yes, I would probably seek out a lawyer.  There are so many rules out there right now with Dodd/Frank that a laymen would spend forever trying to figure them all out. 

Make sure you hire a RMLO to approve your buyers.  

Yeah I would have it in an LLC.

I love owner financing as the seller.  I have only done three back in 2011 but they all resulted in excellent returns.  So start whenever you want.  

Anyone can place a lien but remember you can bond out of that lien then sue their *ss.  You have proof of payment so you really don't need a release of lien.  Trust me, one lawyer letter over a measly $1900 and they will be running with their tail between their legs and begging you for forgiveness.  If they slow a house closing over a lien and they lose they could be in for a rude awakening if you can prove you were harmed, which you can.  

This is just my opinion consult your attorney.  

I just don't understand these contractors, do they only want to work with every person just one time? I just can't figure out how so many contractors as so short sighted.  It doesn't take very many rehabbbers/builders and you will have a pretty nice book of business.  

Don't pay this idiot until he is 100% complete.  If he fails to complete in a timely manner I would tell him you are hiring out the remaining work and you will deduct it from his final pay.  I just did that today and the owner was there 10 minutes later making 100% sure his crew was there to get the job completed.  

I like J Scott's advice and would follow that on how to handle final payment.  

Guys just remember never let a contractor get ahead of you in regards to work/pay balance.  He should always be ahead of you(more work than pay) not the other way around.  If he has a problem with this find another contractor, the good ones won't have an issue.  They can easily track you down, it's hard to track them down.  

Goodluck...

Your average buyer doesn't know anything about repairs, how to do them, or how much they cost.  They might think that it cost 50k and so they pass on your house.  

I've gotten to the point that I just repair it.  You don't recoup these funds directly with a higher sales price.  You will however more than likely recoup these funds indirectly by a quicker sell, less carrying costs, faster turnover of your proceeds, etc.