All Forum Posts by: Michael Myers

@Nhi Nguyen I live over in Pleasant Hill, and had a similar thought that MTR might be a great option for this area. I don't have anything here personally, all my rentals are long-term and out of state, but I'd be up for chatting about it if you want to bounce ideas!

Hey Everyone!

We are looking for a new contractor to take over a duplex conversion project we have going in Denison, TX. The last one we had flaked out after all the rough-in was finished, so now we're looking at either selling to another investor or finding a new contractor who can give us a reasonable bid to finish it up. Any suggestions?

Thanks!

@Steve Vaughan thanks for the input! That’s what I was thinking, but wanted to make sure I wasn’t missing anything.
I'm guessing I then don't take any depreciation until I exercise the purchase option, at which point I start depreciating on the normal 27.5 yrs for SFR based on my final cost basis which includes my initial option money.

Hey guys, interesting situation here. We just got some properties under a master lease option. We paid the lease option down payment and are taking over operation. We structured the contract in such that we realize the monthly loan pay down over the term of the lease option, so at the end of the term we will only owe what is remaining on the in-place loan (our lease option down payment was the difference between the purchase price and what is still owed on the seller's loan).

My question is: how do I account for this in my bookkeeping? Is the lease option money an expense, or do I log it similar to a down payment on an asset? And what about monthly payments: are they simply classified as a lease expense, or is there some funny business due to the split between principal and interest since we are essentially decreasing our final purchase price with each month paid?

Hope you can help! Thanks!

 Yes, thanks @Michael Plaks. I knew what to do with the loan costs, was just trying to make sure I knew what to do with the "non-loan costs" associated with the refinance such as transfer taxes, title insurance, settlement fees, etc.

@Tony Kim awesome, that's what I just implemented into my bookkeeping. Thanks for the clear and concise answer!

@Greg Scott thanks! So sounds like my first intuition of making a new asset then depreciating was correct? From Brandon's article it seems like he's under the impression that certain things like title charges (settlement fees, title insurance, etc.) and government recording and transfer charges get added to the property cost basis and depreciated over the life of the property as opposed to amortized over the life of the loan; is that not the case in your experience?

Hey Everyone! I've been working through Brandon Hall's guide to the treatment of closing costs (link) while finishing up a refinance, and I think I have everything figured out except when he says that some costs are "Added to the cost basis of the property and depreciated". How would I do that in my bookkeeping software? My first guess is that I sum all those amounts up and then create a new fixed asset that depreciates at 27.5 years (for SFR), but then use the refinance close data as the depreciation start date. Is that correct? Or is there something I have to do with the original fixed asset purchase amount? Many thanks in advance!

Looking for recommendations on a CPA to fill out a 990-T form for my self-directed IRA. Hopefully I'm not too late to the game, wasn't expecting to get a distribution from the syndication last year but things went well and ended up getting the first one in December, so now I've got to file because of UDFI. Thanks!

I opened one earlier this year with a local credit union up in the Bay Area. It was free to set up for up to $250k and rate at prime + 0.25%, and went super smooth. I’d recommend shopping around to local banks in your area to see what they can offer.