All Forum Posts by: Manas M.

I am looking to purchase my first investment in Houston area. I would appreciate some feedback on which neighborhoods are appreciating fast. 

I am primarily interested in new construction - single family residences, out of current flood zones and areas with stable rent.

Thanks

The school is close Hueytown elementary. I generally look at the crime data from realtor.com and that neighborhood is mapped in very light color (low crime). Would love to know how that maps based on your experience

@John Patton Thanks for your comment. Since I am a new investor in that area, it helps boost my confidence as well

I recently closed on a property in Hueytown. From what I understand, bessemer is big and parts of it are rough. Hueytown is probably better. There is big Amazon warehouse south of Hueytown which is driving some of the investment in that area (promise of new jobs).

I would suggest you call a few local property managers and get a feel of the area. The "negative equity" is definitely one of the reason why I haven't been able to find a good turnkey deal yet. FWIW, my investment is 3 bed, 1bath and I got it for $105k. I am expecting it to rent for $900-$1000.

@Drew Sygit I agree that a real estate agent may not have enough incentives to screen for a good tenant but then, tenant churn and maintenance calls are good business for property managers as well. I know some PMs provide guarantees again tenant breaking the lease and I would tend to trust them more in finding a good tenant. I have bad experience with PMs where tenant broke multiple leases in a year and I had to fight to get concessions on the leasing fee with my PM (I have couple fantastic PMs as well so its a mixed bag).

I do plan to do my own diligence in picking up the tenant.

@Jennifer Ruelens Agree that this doesn't shield me if someone wants to sue me as property owner. Eventually I plan to move the properties in the LLC so my name would be off the owners list. I just want to setup the lease right from beginning.

Thanks for bringing up the insurance aspect. I have liability on the property as well as umbrella but I have thought about insurance what insurance do I need for LLC if I am leasing through it.

Hello fellow investors,

I'll be moving one of my property out of professional management and just try to manage it on my own. The property is currently not leased and I have a trusted realtor who has agreed to help me with marketing and screening process (and I'll be doing the necessary diligence as well).

Now, I want to lease this out via the LLC (that I would setup) even though the property is currently owned by us in a trust. I understand this may not provide the best structure for limiting liability (as would holding the property in LLC would). However, I like the idea of separating out the business aspect of leasing to the LLC.

Are there any potential legal issues that I should be aware of in doing this? Anything that could lead to the lease not being enforceable. As I see it, this is not very much different than signing up with a property management company to manage the lease (but of course in this case, the property management company is also owned by us).

Any other advantages of this structure (other than the separation of business aspect)? Is this something folks do commonly? 

Thanks

oh btw, thanks for writing up your experience on the blog. I found that very informative.

@Philip Ma Thanks for the reply and really pumped to hear from someone actually exercising the plan I have been thinking about. I have read through the regs earlier but there were couple of lines that were confusing to me. 

1) Page 491 has an example of a hotel developer but it says the developer constructs the building with intent to sell it to a QOF. I am not sure what the intent really means (does the developer certifies it somehow? Do they get some tax advantages by demonstrating this intent). I am sure the SFH I have looked at are not exclusively for OQF so do they still qualify? Or the intent of developer don't matter if the OQF can satisfy the first use requirement (by buying directly from the developer).

2) Also, not sure if the developers depreciate the units while they are siting vacant. If they do, I guess that would violate the first use requirement.

I found several posts about QOZF on BP but don't have a satisfactory answer to this question yet. I know a turnkey property that is doing some new construction in an OZ. I am pretty sure they must be using some of OZ benefits to develop these areas. 

Now, if I setup an LLC as an QOZF and purchase one of these new construction (perhaps with 50% in leverage), would this purchase satisfy all requirements of the OZ program? 50 % of funds would come from my personal funds which are eligible capital gains.

My thoughts are since would be a new construction, it wouldn't require  a "substantial improvement". However, what gives me doubt is that fact that I am not purchasing land and developing from ground up (which would have made this eligible definitely IMO). 

This is going to be my first year filing taxes with rental property. I know that some of the costs (like loan costs, points, closing costs) are amortized over the life of the property. I am interested to know what tips others have to track these deductions year after year. As I add more properties, the likelihood of loosing track of some deductions increases.

I know a good CPA can perhaps keep track of this but I am trying to file taxes on my own.

I can look at last year's return to figure out how much from each cost item is left to deduce but not sure if this is the best way. 

Any suggestions for a good software which can help keep track of such amortized deductions.