All Forum Posts by: Mark Trebor

Hi Alan, 

My wife has a business and its an S-Corp I have my real estate business and it's a partnership.  To answer your question regarding the "best taxation status" I would say they are the same.  Both the S-Corp and the partnership generate a K-1 that gets put on your personal tax return, they are considered pass through businesses.  I'm not an accountant or a lawyer so please take this as my understanding and not something as fact.  Good luck.

Are you sure it can't be rebuilt if it burned down?  I would think you would be able to rebuild but not modify the foundation/foot print of the house?  If you could prove that it can be rebuilt then I think you would have an easier case with getting it appraised for more..  Good luck, curious to see what other ideas pop up.

Start with the local building official at the city hall.  In Minnesota you would pull permits with the city saying you are making improvements.  And after the work is complete the tax man will show up and re-evaluate the property.  Unless the pitch of the roof is steep enough you might struggle getting a "legal" bedroom.  Things very from state to state but a ceiling height of 7 feet over more then 50% of the room area is pretty common in MN.  If it's new construction then 8 foot ceilings are needed.  Good luck

Thanks for all the feedback, I really don't like keeping tenants money.  My goal has always been to return 100% of the security deposit plus interest.  I in no way will keep all of the deposit, we state in the lease the cleaning fee is $75/hour.

Smoking weed has become very popular with the college kids and its something we see/smell much more often and its becoming increasingly frustrating.  I've always heard keeping money for smoking related violations is a tough one to fight and win if they take you to court.  Thanks again for all the advice. 

My lease says the house does not permit smoking in the house.  After entering the house at the request of the tenants for some basic maintenance I find cigarette ash trays, hookah pipes and water bongs.  All of these items are in plane view.  And the house smelt of the cigarettes and weed.  I'm not judging these guys for what they are doing but I just don't want them doing this in my house.  I took pictures and sent an email reminding them that smoking is not allowed inside the house.  Do I have the right to take security deposit money from them for a lease violation.  They have just moved out and the house is being cleaned for the next round of college kids.

@Immanuel Sibero

You are correct I misspoke. I was thinking more about the impact your capex account has on your cash flow and I swapped in NOI for cash flow they are not the same... my bad.

The reason I have cashflow on the brain is because when I buy single family house I do not concern myself with all of the metrics mentioned.  I want to know does the house cashflow after all expenses.  It helps keep the decision to buy or not buy a house much easier.

I believe most people include their CapEx as an expense in their NOI calculation.

I have had the same questions asked of me, I have stayed away from it.  But I did come close a couple of times, what I found was you wanted the investor to really be a partner, otherwise you run into a bunch of tax consequences related to syndication and passive investments.  So maybe start a second company you each toss in 50% and see where it goes?

I have had good luck with Foremost which is a subsidiary of Farmers Insurance group.  I have 19 houses and they offer multi house discount, they also let me set the amount for what I want the house insured at.  I have a number of old historic houses that would cost a fortune to rebuild, but there old historic charm adds little value in the college town so insuring a property for 2X what its worth doesn't make sense to me.  Good luck.

Wow!  That is a crazy story and I thought people shutting off the furnace in winter and freezing all my pipes was bad! 

Man people can suck, what you described is my worst nightmare.