All Forum Posts by: Michael Ruvido

Thanks Zachary, much appreciated!  I was thinking I might be over complicating it, but I wanted to be safe and check with the professionals.

Thanks Jason, I really appreciate the response and info!  I'll take a look at all three safe harbors to learn more about them.

Hi All -

I have what I hope is a quick question for the tax professionals out there. The master bath in one of our rentals only has a jacuzzi tub, no shower head at all (weird, I know!). We're going to tear out the drywall around the jacuzzi, replace it with cement board, add a shower head, and tile the surround. The jacuzzi itself isn't being touched and the only plumbing is adding the water line up to the new shower head. Total cost is $3,200.

I know the De Minimus safe harbor rule allows you to deduct anything under $2,500 and that anything over this amount, if considered a capital improvement, would need to be capitalized and depreciated over a certain period of time (the life expectancy of the improvement). In your opinion, is doing the work I mention above a capital improvement or an expense? Why do you think it's one or the other? Any info you can provide would be appreciated!

Thanks!

Thank you both, that's what I was thinking as well.  It's all about the numbers!

Hi All -

Thanks in advance for any insight you can provide. I used part of a $187k HELOC on our primary home to pay cash for a single family in Indy. The remaining HELOC cash was used on half the rehab and I took out a $60k personal loan to cover the other half of the rehab. The personal loan is for 12 years at a 5.74% rate ($577.47 monthly payment). The Indy project is all done and I have the cash to pay off both the HELOC and the remaining balance on the personal loan ($57,500). Towards the end of this project we were able to increase the HELOC on our primary home to $318k. The HELOC rate is prime minus 0.5%, which is currently 5.0% (5.50% - 0.5%). Is it worth keeping the $57,500 for working capital instead of paying off the personal loan? Instead of having $318k at my disposal I could have $375k at my disposal.

One nice feature about my HELOC is that I can turn any part of the outstanding balance into a fixed loan with the prime minus 0.5% rate. I can do that up to five times.

If it matters, my DTI ratio with the personal loan is 36%, without it it's 29%.

We're looking to get another LTR or possibly a STR in the near future. We have a good chunk of cash already, but just thinking it can't hurt to have more and a rate of 5.74% on the personal loan isn't bad at all.

Hi All - 

Is anyone investing in short term rentals in Indianapolis?  I have a 4/3 single family house near Garfield Park in the South Village that I'm thinking of using as a short term rental.  It has been completely rennovated within that last six months, but I'm not sure how short term rentals fair in Indianapolis, especially if you're not in one of the "hot" neighborhoods like Fountain Square.  I'm doing research online using multiple websites, though it's hard to beat first hand knowledge from someone who is in the thick of it.  If anyone has the experience I'm looking for I'd love to pick your brain.  Reply here or DM me, either one works for me.

Thanks!

Mike

I used Corporate Direct back in January. I set up LLC's in Wyoming (holding company), Indiana, and Alabama. $700 per LLC. I spoke with Anderson as well, but couldn't justify the cost (especially since I just started investing last year). I was very please with Corproate Direct's service. DM me and I can give you my contact's info if you'd like.

Thanks Michael, I appreciate the recommendation!

Hi All - 

I'm looking for an attorney in Montgomery, AL that can quit claim a deed into an LLC for me. I contacted the lawyer who did my closing last year, but I haven't heard from him so I'm on the hunt for another one. I'm in Mass so I don't know anyone to contact and I thought a recommendation from someone on Bigger Pockets might be better than doing a Google search.

Thanks! Mike

I just opened 3 business checking accounts with Chase last week. I live in Mass, but have LLC's in Wyoming, Indiana, and Alabama. None of the LLC's are registered in Mass because they aren't doing business here. I wanted to use a smaller local bank as some people have suggested, but none of them would open business checking accounts because the LLC's are not registered in Mass (I checked with close to 20 banks). This led me to the larger national banks, with both BoA and Chase being the front runners because they have branches close to where I live. BoA requires a minimum balance of $5,000 across ALL your business accounts in order to avoid the monthly maintenance fee. Chase requires a minimum daily balance of $2,000 in EACH account to avoid the monthly fee. I wanted to go with BoA because I know one of the LLC's will have way more than $5,000 in it on a daily basis so that would take care of the monthly fees for all three (allowing me to not worry so much about the balances in the other two accounts). Turns out BoA wouldn't let me open accounts for the Alabama and Wyoming LLC's because of the unique setup... My Wyoming LLC owns the Alabama LLC so when you check on the Secretary of State's website in Alabama you see the member as my Wyoming LLC, not my name. And since Wyoming doesn't require LLC's to show their members online when you look on the Secretary of State's website in Wyoming you don't see my name either, only the name of the firm that set up the LLC. Because of the anonimity in both LLC's, BoA wasn't able to prove that I own them so they wouldn't open the accounts. Chase, however, allowed me to open them so that's where I ended up. So far I've been pleased with the service at the local branch and with their website/moble app. Now I need to start applying for business credit cards and BLOC's to help me scale!