All Forum Posts by: Michael Otis

Yes, I had to move for a job. Great! I just wasn't sure how the capital improvements would affect that. Thanks for the advice.

I bought a duplex financed by an FHA 203K loan on May 15th, 2016 and lived in it until December when I had to move and I started renting it out. I bought it for 115k and renovated it for about 35k within the 203k and another 5k of my own money. I have someone under contract to buy for 172k.

My question is, what cap gains taxes am I going to have to pay? Do I have to pay from the 115k to the 173k? Or do I include all of the renovation costs into it as well?

Still available.

Great up-down duplex within walking distance of Drake University. The 3 bedroom upper unit has been completely renovated and has plenty of usable space. The lower unit has great character with fireplace and sun porch.

Both units are rented out, with very little out of pocket costs, I only pay for lawn care in the summer. Tenants pay electric, water, trash, and gas.

The house has all new wiring, plumbing and flooring.

You can view the listing Here

For more information reply here, send me a message or contact my realtor from the link above.

Upper Unit:

Lower Unit:

My first thoughts would be that if they signed a lease, they're contractually obligated to pay. If they don't, you can evict them, with or without a rental certificate. My advice would be to get an attorney.

Newly renovated duplex. Upstairs unit was completely renovated. New kitchen, bathroom, paint, flooring, carpet and new wiring. Upstairs has full appliance package, all stainless steel. Washer/dryer in-unit. Downstairs unit has new carpet. Both units have brand new water heaters, central AC, forced air heat. Among many more additional upgrades throughout the property.

Currently, 10% cap rate at 200k. Upstairs unit was rented at a lower out of season rate and can pull in another 2400 annually or more in August. The unit is half a block from a major Iowa private college, Drake University. Currently, fully rented to a family (Daughter and husband downstairs, mother/father/son upstairs). Lower unit has an extra $90 in pet rent and upstairs unit is $30 in pet rent. Netting an extra $1440 a year. Lower unit lease is month-to-month and upstairs unit is only until August to coincide with the school year.

Okay, here is what I have typed and proposing to them:

Anything more I need to ask for or relay? His felony conviction was about 10 years ago when he was a minor, so I figure if he has a job and has been a contributing member of society, it might be okay but I'll put necessary precautions in place to protect myself. Good idea to do it this way? Otherwise he'll just stay there anyway, I might as well put him on the lease and recoup for possible damages.

 No, they won't be moving in until Saturday. I'll be back in town for Christmas so that'll be my next time to check in on them besides having my contractor stop by. 

 No They're not on the same lease but I'm worried that if I terminate one, the upstairs will get trashed which I just spent 20k to completely renovate. 

 I did screen everyone that would be living in the property and everything checked out. The woman living in the bottom unit had rave reviews from her employer and previous landlord but nothing about the husband came up since she said he was her boyfriend and said he was living somewhere else. I'm waiting a callback from my attorney on how to proceed and cover myself against litigation.