All Forum Posts by: Mwazomela Thurmond

Toronto is expensive, but deals don't have to be on-market or financed through a bank. If you can get a loan at a good rate, with manageable payments, or even the seller to help with closing costs or (maybe seller financing). 

Start getting an idea of what rents in the area you're looking for are, so you can know what to charge people and plan what you can afford to borrow. You don't need to buy a duplex or triplex right away. You can start by renting out a room in your current apartment or house. This will give you a chance to build up your equity and savings, and it will also teach you the basics of being a landlord.

• First, I'm so sorry you had to deal with tenants like that. I'm glad it didn't let it break you. Yes, tile is generally more durable and easier to clean than vinyl plank, especially for tenants who may not be careful about cleaning up after their pets. Tile is also less likely to absorb odors, making it a better choice for homes with pets. Replacing carpet with anything other than carpet can make it more friendly to tenants with allergies.  
• Plus, if it's happened before, you've seen with time it can happen again. I know you probably considered having a no pet rule, because what you're spending on carpet cleanings could be going elsewhere. 
• 
  Consider the budget. Tile and commercial-grade vinyl plank can be more expensive than other types of flooring. Get a good tile company with reviews and references you can trust. 

If you are planning to refinance in 3 years, it is unlikely that you will save money by buying discount points. This is because discount points are prepaid interest, and you will lose that money if you refinance before the end of your loan term.

However, if you are planning to keep the property for 10 years or more, you may save money by buying discount points. This is because the lower interest rate.

If you are looking for the lowest possible interest rate and longest possible loan term, then a commercial loan may be a good option. However, if you are unable to put down a large down payment or provide the required documentation, then a conventional investment loan may be a better choice. Plus commercial loans take longer to approve This is because commercial lenders need to carefully review your financial situation and business plan before approving your loan.

Hope this helps, a friend told about his first experience using a commercial loan to purchase a commercial building and the process started out simple and got more complex quick, and said the closing costs were also significantly greater than he anticipated, but some lenders will roll the closing costs into the cost of the loan if you go that route. And shop around as well in the commercial loan space. 

The rent for Section 8 units is a bit of a dance between you and the housing authority. They won't give the green light for a rent higher than the Fair Market Rent (FMR), but if your place is looking good or your tenant's rolling in a bit more dough, there might be some room for negotiation.

The Fair Market Rent (FMR) which is like the rent limit set by the housing authority. The FMR is a measure of the amount of money that would cover gross rents (rent and utility expenses) on 40% of the rental housing units in an area. 

For example, if the FMR for a 1-bedroom unit in your area is $1,000, you can expect to receive $1,000 per month in rent from HUD for each 1-bedroom unit in your property.

You can find this on the HUD website, and it gets updated every year. Find out what is is. 

Then use tenant income, property condition, and market rent, and cost to operate as a rental (property taxes, insurance, and maintenance costs, etc.) to go from there on how to price the unit. 

I work with multifamily investors in Norfolk and all throughout Hampton Roads, so if you're looking for someone to get you a little closer on that journey, I can help you in person as well. We can talk to some section 8 landlords and owners. And in the meantime, try a section 8 calculator to see what you can profit. 

Yes, once the contract ends, if it doesn't sell and if they don't bring a qualified buyer within the window of the contract, you can can find another agent because it must have an end date. If the agent can prove that they brought a buyer who purchased (basically prove that it was their efforts that resulted in a sale) after the contract ends, then you might be obligated to pay them a commission even though the contract has ended.  

Since you are an Australian resident selling property in the USA, it is important to consult with both a US accountant and an Australian accountant. Under the treaty, Australia has the primary right to tax capital gains from the sale of real estate located in Australia. However, the US may also tax these gains if the seller is a US resident or citizen.

Talking to both US and Australian will help make sure that you are taxed correctly, that you are taking advantage of all available tax credits and deductions, and you don't leave any money on the table.

Commission

5.5% commission is on the higher side for North Phoenix, but it is not unreasonable. The average commission rate in the area is 5%-6%, so you are not being overcharged. However, you should try to negotiate the commission rate down, especially if you are willing to sign a longer-term contract with the agent.

If you negotiate further, it does not mean that you are being unfair to the realtors. Real estate agents are used to negotiating commission rates, and they expect to make a profit on every sale. If you are able to negotiate a lower commission rate, it simply means that the agent will make a slightly smaller profit on your sale.

FIRPTA

FIRPTA applies to all foreign sellers of US real estate, regardless of whether they have been filing US tax returns. The withholding tax rate is 15% of the gross sales price.

However, there are a few exceptions to the FIRPTA withholding requirement. One exception is if the seller has a US tax treaty with a country that has a reduced withholding tax rate. Another exception is if the seller is able to obtain a withholding certificate from the IRS.

To obtain a withholding certificate, the seller must file Form 8288-B with the IRS at least 30 days before the closing date. On Form 8288-B, the seller must estimate their net capital gain from the sale of the property and request a reduced withholding tax rate. The IRS will then review the seller's request and issue a withholding certificate, if approved.

If FIRPTA does apply to you, you should not try to play around with the number to avoid paying the withholding tax. The IRS is very strict about FIRPTA compliance, and if you are caught trying to evade the tax, you could face significant penalties.

Recommendation

I recommend that you interview several real estate agents before you choose one to sell your property. Be sure to ask each agent about their experience selling homes in North Phoenix and their commission rate. You should also ask each agent about their plan for marketing and selling your property.

Once you have chosen a real estate agent, be sure to get everything in writing. This includes the commission rate, the marketing plan, and the closing date.

You should also consult with a tax advisor to discuss your FIRPTA liability. Your tax advisor can help you determine if you are eligible for any exceptions to the FIRPTA withholding requirement and can help you file the necessary paperwork to obtain a withholding certificate, if needed.

@Adam York You can consider taking an out-bound approach and reaching out to realtors and brokers (email, call, LinkedIn as mail might not be fast enough). If you aren't already, you can even offer a referral fee or percentage of the first month's lease to motivate them. Other good sources for renters could be hiring agencies, military housing advisors, and other people who may know people who are relocating due to employment and don't have time to buy a house.

What would the ideal residential subdivision lot have to have for you to make a cash offer?

The lot I have in mind is in an award winning golf course neighborhood in Williamsburg.

How much would you offer if you had cash and would you base your offer off of the land assessment value or the value of homes that have been built around the lot?

Let me know if you would buy the land to build a single family home as an investment.

If you invest or live in Hampton Roads, you may have heard about the "Pharrell Williams" development project in Virginia Beach, Atlantic Park, for the last five years but just like working on any construction project, it takes time to get approval before you can start building.

The venue will be located on Arctic Avenue between 19th and 20th streets, and Venture Realty has already announced that construction on Phase I will begin immediately, with an anticipated opening date of summer 2025.

According to the development group, Venture Realty, Phase I is set to include a ton of new restaurants, shops, and experiential attractions. Not to mention, over 300 multifamily homes, office space, a 70,000-sq.ft. entertainment venue, and a massive Wavegarden Cove surf park that's sure to impress. 🌊🏄‍♂️

But wait, it gets even better! Phase II is currently in the works and is set to include even more public parking, residential and retail space, and a boardwalk connecting Atlantic Park to the Virginia Beach Boardwalk. 🚶‍♂️🛍️

In response to the announcement, Virginia Beach Mayor Bob Dyer said "Atlantic Park changes everything for Virginia Beach”.

This is definitely a project to keep your eye on. With all of these exciting plans, Atlantic Park is sure to become a major vacation destination in Virginia Beach! 🎉🌴

Based on this news, would you be planning to buy or sell real estate? Please mention what type with your reply.

Rising interest rates, low inventory, and housing price increases are a few of the main reasons build-to-rent homes are making an impact in hot real estate markets like Fort Worth, Texas.

Based on your real estate market, do you see this trend making an impact in your area?

Here's a link to the article on the "Build To Rent" strategy:

https://fortworthreport.org/2023/03/20/build-to-rent-homes-gaining-popularity-in-tarrant-county-market/

Hopefully this rental strategy gets enough media traction to be covered on an episode of Bigger Pockets.