All Forum Posts by: John Woodrich

I highly recommend @Tim Swierczek - he recently helped a couple of my clients with cash out refinances on their Rochester portfolio.

@Bill Zhou setup a consultation with @Brad Schaeppi at https://minnesotalandlordlaw.c... and he can discuss your options with you.

Somewhat of a messy situation, your LLC isn't offering you much, if any protection if the properties are titled in your individual names. For tax purposes - I am not sure how everyone acquired the properties but you shouldn't be reporting your parent's income on your return. Also brings up the question of gifting issues if they gave the properties to you or if you are gifting them the cash flow.

Timing a 1031 is going to be hard. You may first want to talk to an attorney about your LLC, deed transfers to get you protection, and if you have gifting issues. The deed issues will create more problems if you are to sell so that is where you will want to start.

The thought of going to 4 plexs to double your "CAP" rate will also be tough. Properties under 5 units are typically not valued based on CAP rate but I suspect that is just a metric you are using to compare assets.

General answer in most cities is 3 unrelated, I also recall the 2040 plan removing it but I am not sure where they are on implementing the plan.  Comp plan doesn't change the ordinances but it lets the city work towards that direction.  I will echo Amber's advice on calling the city.  You may be able to get more rent in renting by the room but you will also likely have more tenant drama to deal with so if you want to be more of a "passive" investor this may be a hassle.

At that point it would be a return of basis similar to when someone doesn't elect installment sale for any reason.  Doubtful the payer is going to issue a 1099 but if so I would just offset the income on the return. 

You can go to the recorder's office and review the recorded documents or you may be able to have a closing company run a title search for you.  If you get close to a purchase I would recommend discussing with an attorney.  @Brad Schaeppi is an expert and you could setup a consultation on his website https://minnesotalandlordlaw.c...

I have purchased one property this way.  It is rare that a property goes through this without other issues.  For example it may have a medical assistance lien or otherwise.  I would recommend you first try to understand why it is going through this process if you can.  

MN Doesn't have a separate capital gains rate, it is the same as ordinary income.

Good luck on discounted materials - we all want them.  Supply chain broke last year and prices went up.

You can only deduct what you pay for a gallon of paint, not what it is worth.  In the same context you can't deduct your own labor either, only out of pocket costs.

I second reaching out to @Tim Swierczek - he has helped hundreds if not thousands of people purchase a MF and is very familiar with the house hacking strategy.  

@Jay Axness you don't need to file form 1099S.  Your contribution to the partnership is a code section 721 transaction and generally no gain or loss is recognized unless your debt exceeds your basis.  If you add partners you will want to seek help, there are certain rules which could push a gain back on you two personally if you sell in the next couple of years.