All Forum Posts by: Maximilian Glodde

Hi everyone,

I have a strange situation with my condo so stick with me here.

Our condo (unit 2) is in a 2-unit building. The HOA does not restrict long term rentals. Unit 2 (zones as a single unit) happens to be split into to smaller apartments (2nd and 3rd floor) with individual entrances and exits, separate kitchens, bathrooms, etc. This was done before we bought it and by looking at the permit history was approved because the front stairwell is technically inside of unit 2, which makes the two floors contiguous. It's like a condo with an in-law unit. Furthermore, we wouldn't have been able to get a mortgage on the place if things weren't above board.

We currently live here and rent out the upstairs apartment to my family, so no issues at the moment.

We are moving soon and would like to keep this condo and rent the two floors to separate parties. It's like renting a room but a whole floor instead. Each floor would have their own lease. My downstairs neighbor (unit 1) made an off-the-cuff remark a while ago, stating that we wouldn't be able to rent out the upstairs apartment if they weren't my family. This has caused me to look into the matter further (incl. lawyers) with little success.

Has anyone ever come across this situation? If so, your insights are appreciated.

Thanks

Thanks @Bob Norton! This is very helpful. Will a simple document signed by all members of the LLC suffice?

I am listing out date, amount, interest rate and repayment term.

Hi, I am sure that this has come up before but couldn't find the exact answer I was looking for, so here goes.

My business partner and I are buying a flip (in our LLC's name) and I am providing the funds for the down payment. When the flip is completed, we will pay back the lender as well as myself. Is there anything specific that I need to consider to make sure I am not going to run into any tax issues when the business pays me back?

Thanks

Why wouldn't you just get a HELOC against the equity in your property and use that as a down payment on your investment property? Commonly HELOC's have a 10 year draw period with interest only payments and then need to be paid back (principal + interest) over 10-20 years. Sounds to me like the program is attempting to lure you with lower "interest only" payments, likely at a higher rate than a conventional mortgage. Not only would you not be paying down any principal over this time but you are also putting yourself in a worse position in the long run.

This sounds sketchy at first pass.

Hi @Gabe Fernos,

When you say your home won't cash flow well, what do you mean in $$ terms?

Assuming you can cash flow to some degree on the property, I would consider the followin:

1. If you have PMI on the property currently, consider getting that removed via refi.

2. As long as you live in the property, you can take a HELOC on the property up to full value and use that money as a down payment + reno on your new place. Say you pick up a multi for $400k and live in half, you'll likely be able to put 5% down and have plenty cash left over for renovations if needed.

3. If the market is that competitive, surely you should be able to rent it out with little difficulty.

4. I would look at you entire portfolio when it comes to how much you could make. Meaning, if you can keep your current property and get a HELOC, you avoid the selling transaction fees and get access to the most cash. When you combine the fact that you will be renting our the other half of a duplex with owning your current property, you'll probably find that your monthly payments will fall on a net basis while growing your asset base.

Thanks @Marina Draper, that's really good to know. 

Thanks so much @Ann Bellamy!

@Ann Bellamy it's been a while, but do you happen to have a recommendation for a tax accountant that works with investors? Thanks in advance!

Thanks for the reponse @Dave Foster. I am using a single owner LLC, which looks like it is a disregarded entity.

Awesome work @Adam Slipher!!!! Thanks for sharing.