All Forum Posts by: Marty N.

Thanks very much for the replies.  Mike H., that is great information on the component depreciation and just what I was looking for in particular.  I have read a little about that online.

Hello everyone, I have one single family home as a rental property that I purchased in March 2015.  It cash flows on a monthly basis pretty well and I was just wondering what I can do to maximize deductions on my 2015 taxes?  Property taxes are due in January, but I will pay them this month.  Same for my insurance policy, due in March, will pay this month.  Maybe make January's mortgage payment this month.  Those are all fairly common ideas I think.  Anything else?

Thanks for your help.

thank you all for the great information.  I really appreciate it.

thanks for the reply Brian.  So can my friend build a rental house on his property and rent to non family members?  I guess I don't understand how he can't benefit?  Why invest in anything if you can't benefit?

Can he do a ROBS and form a C Corp, solo 401k, then build a house to rent to his parents?

Hello everyone, I have a friend who is looking to move his parents closer so he can take care of them more as they age. His personal residence sits on a large enough lot, that he wants to build them a small residence on the back of his property, and they will rent from him. He has funds in an IRA that he can turn into a self directed IRA. Can he then use funds from that for this project as a real estate investment so as not to incur interest or penalties? If not, is there another way? Thanks.

Elizabeth, thanks for the reply.  I certainly don't want to get sideways with the IRS.  Seems like rental market values and discounts are fairly subjective and wondering if an $1,100 rental on a property I could get $1,400 would be a huge red flag.  What if my mother in law signs a longer term lease?  Might that warrant a lower monthy rent than a 12 month lease? Is there any more definitive guidelines on this?

Also, I realize $100 a month wouldn't cover all upkeep repairs.  But since it is my mother in law, who is on a fixed income, we would be willing to absorb some extra costs if we needed to.

Guy, thank you also for the thoughtful response.

My sister lives in Alaska and has no desire to be involved in renting, or maintaining, the property.  She is OK with me doing that and trusts that when the time comes, I will do the right thing.  Since I will be making the entire monthly payment to my mother, and I will be solely managing the rental, it made sense that whatever equity is built from now until my mother's death would be mine.  Keep in mind the payments I am making to my mother are likely going into a bank account that my sister and I will share equally also.  This is how we arrived at the premise that upon my mother's death, whatever remaining loan balance would be used to determine her half of the inheritance.  It seems logical to me, but maybe I am missing something.

Regarding my mother in law.......I would never evict my mother in law.  In the unlikely event she would outlive her ability to pay rent, my wife and I would be responsible for her financially either by moving her in with us, or to an assisted living facility if that were necessary.

Your response about the deed is good advice and much appreciated.  That is the type of expertise I am looking for.

Bob, first thank you for taking the time to reply.  Respectfully though, you are delving into potential family issues without knowing any of the family dynamics.  For instance:

My sister knows all of my potential plans and wants nothing to do with any of it.

We DO plan to get an appraisal to determine the sales price.  And, it was my MOM's idea that based on a $140k appraisal she would sell to me at about $130 since she would not have to pay a real estate commission or any closing costs.

I am a 55 year old man with perfect credit and have never skipped a payment in my life, and never will.

My mom has ZERO desire to rent her house, no matter the rent amount she could get.  She simply wants to move back home and not worry about the sale of a home, or especially managing a rental.  She takes pride in the fact that the house, and the equity in it, is something she will be leaving for my sister and I.

So, with that being said, I would still be interested in any advice I could get from a real estate perspective.  Maybe this forum wasn't an appropriate place to post these questions.  If that is the case, I apologize.

Hello, everyone. I have dabbled a little in the past in real estate, so not a complete newbie. Still would like some advice from seasoned investors, as I look to ramp up my activity in REI in 2015.

My mother, who is in her 70's, is wanting to move back home to Kansas. She owns her home here in North Texas free and clear. It's probably worth about $140,000. She does not need the cash out, and upon her death, my sister and I would inherit the house. My sister lives out of state, and the house is about 3 miles from me, so i plan to use it as a rental property, and will likely rent it to my mother in law. So, this is a good situation for me.

I have several questions:

First, what is the simplest way for my mom to transfer the home to me? A quit claim deed? A warranty deed? I have seen several of these on legal forms websites, and wonder if it is that simple? Just create the form, sign it and get it recorded at the county office? Or should there be more involved, like using a real estate attorney?

Second, my mom is going to owner finance the home for me with no money down. Probably something like $130,000 purchase price at 4% for 30 years. My calculator tells me that is about $620 per month. Add taxes and insurance of about $350 and I'll be at about $1,000 per month or less. We will rent to my mother in law at something close to that. Maybe $1,100 just to cover any maintenance/repair issues. (the house is only about 6 years old). Market rent for this house would be about $1,400-$1,500 today. Upon my mother's death, half of the balance remaining on this note would be due my sister as her share of the inheritance.

My mom is fine just doing a promissory note with me and not recording a lien on the property. This would allow me, should I choose to do so, to borrow against the equity, perhaps to provide cash down or rehab on another property or two. The payment to my mom and one potentially on a cash out refi would not be a financial hardship for me from a cash flow perspective.

So, am I missing anything here common sense wise or, more importantly, legally? Just trying to think through this and make the most financially of this opportunity. Any advice on how to maximize this as a tax writeoff and utilize the equity in the home to my advantage would be much appreciated.