All Forum Posts by: Mike Taddy

Hey everyone.  I'm currently deployed with a friend that is considering renting out his home in Aurora.  I'm looking to put him in touch with a reputable PM company to help gauge rental rates, costs, etc.  He has a 3BR/2.5 Bath with finished basement, attached 2 car garage.  I believe house is in range of 1700 sq ft.  Any insight to rental rates and PM references greatly appreciated.

PS - I did some search via rentometer and Craigslist and it appears around $1200-$1600, but I don't have enough specifics.  

Thanks in advance!

Mike

@Wes S. you've done your homework.  I may be soon pulling the trigger on the same venture.  As with almost advice on this forum, I'd categorize it as dependent to your situation.  

If it's truly a deal, and this is the quickest, most efficient avenue to procure it, I say go for it.  Again, you've done your homework.  The deal should easily paint whether or not this is a viable option.  Something to consider--the market remains insane and the C, I and S funds are performing strong.  As always, there's an opportunity cost.  

Maybe it's best to share my consideration--it's a "trump card" for me.  I'm working on a portfolio purchase and if I need the $40K loan, I'll do it based on my confidence to quickly refinance and pay it back.  I wouldn't want it sitting empty too long based on high monthly payments and "lost" opportunity cost--which is all dependent on the timing of current market.  

Good luck! 

Mike

Good day everyone.  In short, during the last few months of 2017, I was able to get several properties under contract.  I Close later in January.  Since I didn't have any income yet generated from the properties, I paid for some set-up expenses (minor supplies) and home inspections from my personal account--all paid in 2017. 

When I generate income from the properties, I plan to pay myself back from the rental banking accounts in order to keep it "clean/separate" for tax purposes.  My main question--Since I'm paying this expense from business accounts in 2018, can I claim/file in 2018 taxes as that's when the properties technically "paid" the expense or do I claim them in 2017--despite not having any actual rental properties?

Any other issues you see or suggest?

Thanks in advance...

Mike

Frank Chin's reply alone made it worthwhile to read this thread.  Some great stories there! 

@Doug Webb. I am going through a similar scenario. It sounds like you've done some homework. My recommended next step is to reach out in your local network (probably folks here on BP) and attempt to find a reputable lawyer with specific RE/LLC experience in your state/area.

If you have to apply/guarantee the name in your loan, I'd be honest with your lender and ask their thoughts on you converting to an LLC after. I straight up asked my lender if they would "call" the loan for the due on sale cause and have in writing that nothing will change. Based on where I'm at in the process of being under contract with my 4 unit and 5 unit, I will purchase in my name, but transition to an LLC after, knowing my loan will not be "called."

Good luck.  

Mike

@Sam Koenig,

Thanks for sharing.  I'm new to BP, but continue to find the forum and podcasts incredibly valuable .  In regards to flipping, I don't have experience outside of one we did while stationed in ND.  Anyway, I'm sure you're thinking of this already, but one of the best actions you can do for the next few months (outside of looking for deals) is researching the contractors you expect to use (if you can't do it all yourself)  

I'll admit some of my difficult lessons learned in our recent home purchase and associated work:

I've been out of Wisconsin for nearly 20 years.  Due to my impending retirement from the Air Force, we bought back in our home area.  Being naive, I used some contractors that were long-time family friends or other local "knowns."  I didn't do my homework of getting referrals, reviews, etc.  I greatly regret that. I was naive in my assessment of "good Wisconsin people" because I grew up seeing that.  Also, remember a lot of contractors are scheduled months in advance so plan accordingly (when you can).  

Most importantly, thanks for your service in teaching our youth.  I have 4 children aged 13 and younger.  I'm so thankful for the wonderful teachers we've been blessed with over the years seeing my kids change schools four times.  

Merry Christmas

Mike

P.S. if you become interested in the areas I described, I have a close friend that is an incredible realtor I can refer you to.  He’s retired military with high character and integrity.   PM if interested.  And good luck...

Something to consider if you're buying off the MLS, SA has a huge military presence. Due to the increased "Summer move cycle" the market heats up quite a bit beginning in March and many places in the suburbs of SA will go at or above asking prices. Another thing I noticed when buying and selling there, if you're not used to negotiating/splitting closing costs, get smart on it. I came from a place where it was unheard of buyers paying sellers Closing. Near SA it was standard to see.

The East/NE part along I-35 and North parts near 281 and 1604 are exploding. As mentioned, the North has a great school district.  The Schertz/Cibolo School district is highly sought after as well. I found that you will pay to be in these areas, but the rents are requisite with this demand. 

Looking back, I personally wouldn't buy off the MLS again anytime from April - July. I can't stress enough the influence of the military change cycle. The benefit of the military presence is stable rent payments and collection. High character tenants.

I’m watching this market closely.  I’m interested to see just how much it can continue to explode.  Housing communities and associated retails are going up everywhere.  Many suggest its just a matter of time until SA is “connected” to Austin.  I think anything near I35 on the east side will continue to grow due to proximity of Austin.  

To summarize growing areas I’m familiar with:

North SA

Schertz

Cibolo 

New Braunfels (On way to Austin) 

I saw your other post and appears they gave good advice there.  Only thing I would consider begin networking for private Money. Even if it doesn’t work for this deal, could pay off in the future for others.  The private money will come if the deal is good.  

Patrick, safe to say you're not moving into one side of the duplex?  This is straight investment property?