All Forum Posts by: Natalie Schanne

Bob Smith - show all your revenue (w2 + rental). Use your schedule e (or c) for rental property to deduct whatever you can legally according to the IRS (ideally so the net is near 0 or negative). Rental income - any repairs Jan 1 - Dec 31 - home office expenses, cell phone, education, travel trips for biz - car mileage for rental property or scouting new deals - any management fees / other services like lawn care, plumber, Hvac, etc. - house depreciation (purchase price x % of price NOT land 50-70% / 27.5 years) That's how you minimize net taxable income. If you are making a profit on your property after depreciation, you will need to pay appropriate additional taxes beyond what your w2 withheld. If you need more deductions you can transfer cash to an IRA and deduct it up to April 15.

Brian Christensen - is it better to just act and ask for forgiveness? You are likely to have a prescriptive easement anyway. If you tried to contact for weeks, and now you schedule the work on his property and you don't damage anything permanently, what's the harm? Try to get it all done in 1 day. Make sure to call 'miss utility' or whatever is common in your area before digging. Re-sod the affected area. End headache.

Francis Rusnak - a fixed fee (like $500, 1000) plus a % commission above x for a more profitable deal probably makes sense. You'd have to figure out when it makes sense to pay - shortly after homeowner contract signing or at closing? Otherwise this person might bail after working for a bit without success. Then you've wasted time training. You said he'd be answering calls / meeting with people for leads you generate. Why don't you incentivize him a bit to generate leads too, like placing bandit signs, posting online, etc.

Tyler Brown - Consider this ... Your mother still maintains a permanent residence at the house. She is visiting you temporarily... Mom is renting bedrooms at $1000+/mo (whatever your market will bear) to one or more tenants equal to the total house rental rate (I get 30-50% higher by subdividing - $3000/mo plus vs $2000 for the whole house). Post on craigslist but never with a front house picture or address. Keep the kitchen. Check to make sure the deck and other things are safe. Make sure that all tenants have rental insurance naming mom as additional insured. Ask CPA about depreciating part of the home. Keep utilities in mom's name and bill out to tenants or build into rent. Deduct expenses against the rental income. Eventually mom sells with 250k in free capital gains or passes upon which the house is inherited at fair market price.

Rebeca Perfecto - that doesn't make sense. You should be able to get a duplex loan as easily if not more easily because you can show extra income from the other side. (Unless it's not up to code for the area / un permitted construction ). Message Upen Patel .

Richard Florestan 1. Has anyone done this before or thought of doing it? Some people successfully buy distressed houses if there's equity above the liens. Usually there's not. If the person hasn't paid the mortgage for long enough for it to go to foreclosure (6-24 mo), there are so many fees the original mortgage has ballooned in cost. I try to buy on the sheriff's sale below what the mortgage is and even doing so I have to watch out for $20k in back taxes, Hoa fees, and other liens. 2. What would you be careful about if attempting? Don't assume the person talking to you at the door or on the phone from a mail campaign has the authority to do business with you. (I'm sure a cousin would try to get your $5k cash). 3. Would a title company be a good resource for more information? Could a title company have an issue with them ? You can't get title officially in your name without recording the deed. You'd need a mortgage release. You'd be subject to the banks due on sale clause for the loan. 4. Would I only be able to rent it, or would I have the option and sell it with the first lean paying off the original owners mortgage. Read up on wholesaling.

Jason Scharf - if it's only worth in the 90's to you, get your earnest money ready and ask your agent to send in the offer. Sure, they may decline, ignore you or counter. But what if they accepted? Can you offer all cash with limited inspections/contingencies? I recently helped a BP member offer $325 on a newly listed, damaged REO house in an A area worth $400k after repairs. It's listed at $383 and the bank countered at $380. So, the deal died because it won't pencil. But we've heard plenty of stories where sometimes it's accepted or you negotiate to a suitable in-between. I'm happy to help people in my area make offers that work for them. Ultimately if you never win anything, you'll start to increase your offer prices. One of the best purchases I've made was a $255k REO offer full price, cash, within 3 days on market. Maybe I could have paid less by trying to bargain, but I've been completely happy with the house and appreciation. The house sold for $475k 3 years prior.

Has anyone bought a condo or town home in New Jersey subject to an outstanding HOA Lien? I am considering buying a sheriff's sale / foreclosure property at the courthouse steps at the foreclosure auction for the underwater mortgage.

1. How much did you end up having to pay to get clear title and HOA dues current?

How much $$ for the HOA? How much for their lawyer/fees? How much for your lawyer/fees? How much time? How much did they claim you originally owe and how much did they settle for?

I've heard 6 months of back dues, which is do-able, but I'm trying to figure out how much in attorney fees and other things will also be required. I called the HOA and their lawyer. The HOA told me the outstanding balance but the lawyer wouldn't tell me anything.

One property I am interested in has $12,000 of back dues (at $200/mo) + attorney fees. 

A lien was filed in the county records in 2012 for $2000. The remainder has not been filed.

I've seen other properties worth `$150k at the auction with $60k of HOA liens. These go back to the bank every time.

Thank you!

Blake Chrisman You also need to think about your end game. Are you holding this property forever (until you die)? If not, at some point when you sell it, you will pay capital gains tax on the appreciation between its value and what it was bought at, either by the LLC or you. Going forward as a rental property, you would convert its basis to a fair market value (or what you paid + capital improvements, whichever is lower) and start depreciating the building % of that (usually 50-70%) on a 27.5 year schedule. You will pay depreciation recapture tax on this when you sell. Use the calculators to analyze if the levered ROI going forward is expected to be greater than other investments you can make. If not, consider selling it with the $250-500k capital gains freebie.

Christine Swaidan - try to bundle both expenses (cleaning and replacing) as a single carpet line item for $x. I've never had a tenant ask to see my invoices. It's not especially fair that you're out $$ for trying to save them $$. Carpet is depreciated on a 5 year schedule (or 9 with the alternative plan). See https://www.irs.gov/publications/p527/ch02.html So, by that guideline, you could charge through 100% of the cleaning and roughly 60% of the replacement. You could charge them more, and they'd be able to contest it. I once had a landlord charge me $100 for a preexisting ceiling crack in a $500/mo student rental. But I deposited the check and that was that.