All Forum Posts by: Mike B.

This is what I love about BP...you get all sides of the issue answered!!!

This being my first I will likely get an agent if for anything to streamline, save time, etc...I dont see much downside.

I should be fine looking at properties in the meantime (via calling the listing agent) while I figure out what agent I want repping me?

Ok I know this has been discussed a lot but my search didn't really answer my question.

My financing is lined up and I am ready to to start more serious shopping for my first sfr rehab flip. I have a short list of homes that are currently listed obtained from bank reo lists and mls based websites.

Should I look for an agent to line up viewings at this point (and potentially give me more property options) or just start calling the listing agents for each property?

Say I want to look at a property today or asap, before I decide on my own agent, anything wrong with calling the listing agent to view the place with the knowledge taht later I will have my own agent repping me?

I guess a better way to ask is if there are any common or obvious drawbacks. In my search I see a lot about using them for renters, mostly downpayments, etc. Not much on using it as the primary financing of a rehab/flip strategy.

Thanks for the input!

How common is it to use a HELOC on your current residence (assume the equity is plentiful) for a large chunk or 100% of cash needed for a rehab flip SFR?

I was able to find the answer to my question. What I was looking for is the property is a "business-use" property. This category has to do with the operations of the property. Your owned office building for your real estate company or plant for manufacturing fit into the same category. The intent of course is to hold it, but hold it for the purpose of conducting business operations with it, including renting it to tenants. This was not on my list in my OP.

Thanks Dawn. I am very comfortable with what it is and how to calculate it. My question concerns the actual trigger for when I can claim it assuming a mixed portfolio. Beyond the quick answer of rentals only, what is the actual trigger from an IRS standpoint...(see the examples in my OP) or is the quick answer the actual answer, meaning the IRS wants to know if you rent it, and if yes than you can claim depreciation and nothing else matters (like how long you own/rent it). See my OP examples.

I will always consult appropriate professionals before final or binding decisions.

What is the "trigger" for being able to claim depreciation on a residential property "investment":

Is it investor status (vs dealer) ( assuming intent coincides with status)
Length of hold (like tax rate)
Whether you rent it or not
Or something else.

Best of both worlds....manage your balance sheet at something near 50/50.

This is a difficult topic to keyword search for so pardon me if it's commonly discussed. From at least one taching source (but possibly the same author) I've heard (podcast) or read about setting up your LLC with a C-corp as a small percent owner. The reasoning being certain tax advantages.

My question is general and lets assume I know the LLC structure is whats right for me, but now I'm just considering going the extra step and forming a c-corp to be a 2% owner of the LLC (me or me and my wife as 98%). Lets also assume the straight cost benefit works for me.

Is this setup common? Is it controversial?

I'm hoping those that reply are familiar with the "teachings" because the details escape me but I can go back and find them (and have a mental note to do just that when the time comes and after more DD - like this post!)

Thanks,

Mike

@Jon Holdman - i get having my money all lined up before i am actually ready to buy. This will be done in about two weeks. I am in a good position financially speaking. From a learning, education, and experience standpoint, i wanted to just go and look at some properties - see some potential rehab scenarios and run through my spreadsheets to see if Ive covered everything I saw "in the field". Most importantly, just going through the experience. What im reading from your message is that i cant even look at a property, a standard mls listing, or that i shouldn't bother trying right now? I just thought it would be a good exercise.