All Forum Posts by: Michele Foreman

Originally posted by @Marc Rice:

@Michele Foreman

If your accountant is getting annoyed you either need a new accountant or need to pay your accountant for the time he’s helping you.

In regards the house, what do you mean by “under contract”, as in seller financing where you act as the bank and he pays you monthly?

 Yes, I agree I need a new accountant. By "under contract" I mean we would finance it and act as the bank and he would pay monthly. I have called an attorney about it to see the best way to go, but I assume I need to ask an accountant about the tax implications. Thankyou

We bought a foreclosure three years ago, with the intention of renting it out and being first time landlords. It took three years to complete as we did the work ourselves. Our first tenant couldn't pay the first months rent so we decided to go a different direction and sell it to our son. Here's my question. How do we minimize our tax liability when we sell it? Would it be better to sell it to my son under contract or for him to get a loan from the bank? He has good credit and is able to get a loan.  I have read that if we sell it under contract we can't deduct depreciation, but what about the repairs we have done over the years? Also, if we give him a deal on the property will we get in trouble with the IRS?  I have called my accountant several times about this property, and asked him many questions. I'm afraid he is getting annoyed with all my questions. So if anyone here could help me with this I would be so appreciative! Thankyou!

@John Warren I did call an agent and they were more than happy to give me a price they could list it for, but I didn't tell them we were planning on selling it to a family member, so I haven't set anything up yet with them. Would we need an agent to handle the transaction if we are selling it to a family member?

We bought a foreclosure several years ago for $7,700. We put about $10,000 into it, not including labor. Now we are planning on selling it to a family member if they can get a loan. How do we determine the market value of the house? We would be asking less than the market value, but don't want to ask more than its worth. Do we need to get advice from a realtor and would they charge for their advice? I will be calling a realtor tomorrow but thought I would ask here first to see if anyone had any other suggestions. I tried several online calculators, but they seemed way too low, probably because of the price we paid for it. I figure we can get at least $80,000 to $100,000 for it, but I may be way off. 

I'm not sure if this is the right place to ask this question. My husband and I have bought several properties for our kids and he has always inspected them himself. He can point out things I would never see or even think about. When we bought our last investment property he pointed out things to the realtor about the property that she didn't know about. He would be great at inspecting buildings as a career but don't know how to get started with this. He has seen courses online for a few hundred dollars, but they don't tell you how to get hired as a building inspector after you complete the course. If anyone has this career can you please give some advice on how to get started? Thanks

@Darson Grantham, Who would I contact to find out more about selling it on contract, and would we still need to have property insurance on the house and pay property taxes? What I don't want to happen is to get someone in there, either a renter or someone under contract, and they completely destroy the house and then back out, leaving us with another mess to clean up. Thats why we decided selling and being done with it would be for the best. 

We have a house in Iowa that we bought three years ago as a foreclosure for $7,500. We put around $5,000 into it. We were originally planning on renting it out but decided we don't want the headache of tenants and we just want to sell it. It will probably sell for at least $80,000. How much would we pay in taxes if we do sell and would this qualify for a 1031 exchange if we find another property or would we need to rent it out first? Thankyou

Thankyou for your quick reply! I just contacted my accountant again today and he answered all my questions I had posted concerning the expenses. You say law suits are extremely rare and I hope that is the case in our situation, but I worry about the worst thing that could happen and I overthink everything, at least thats what my husband says! Our stairs have black treads and white risers and also a handrail, but I'm worried about the little ones falling down them, or even the adults, as its pitch black going down them. Although they look amazing! I was considering an LLC because I have farm land that I jointly own with my sisters and it is not protected in any way. I will check the web for a REI organization and thanks again for your advice!

We are first time landlords, and I have many questions. We have had the house for three years, it was a foreclosure and needed lot of work. Basically everything is new, flooring, kitchen, bathroom, partial roof. I have talked to my accountant but I really need more help than he was able to give. First off, what expenses can we deduct this year? I know insurance, taxes, and utilities are deductible. Would I be able to deduct any of the new materials or is all of that depreciated? I also read somewhere that paint was an expense we could deduct but not if its the entire house. I have kept all my receipts over the years and my accountant said I could depreciate all of our expenses over the years but if we ever sold the house then they would have to be accounted for. Also, should we have a separate bank account for the rental account? We haven't done this yet. Can we deduct our mileage every day that we went to the house when remodeling it and our trips to the hardware store? And if so what records do we need to keep for this expense? Should we put the property in a LLC or should we get an umbrella policy with our insurance or both? I'm really scared about getting sued by someone. We have made the house as safe as possible but the family has three little kids and the property is two stories, with the kids bedrooms upstairs. I painted the stairs black, and I have people telling me this is a liability issue. I'm not sure how to make it safer, short of repainting the stairs a different color. I have thought of using glow in the dark paint or tape but not sure if that would work. We have disallowed trampolines and swimming pools, to the dismay of the tenants, so hopefully they will abide by this rule. Also, there are kids on all sides of the property, running through the yard all day. The tenants have signed the contract and will move in September 1. Thanks for any advice anyone is able to give me!

Where do I find a good rental contract?