All Forum Posts by: Nate Byers

Individual invests in multiple real estate properties for 5 years while running their business. In 2019 they buy more properties after they sell their business. They do NOT qualify for RE Pro status.

In 2020 they qualify as a RE Pro. 

They can complete a retroactive cost seg study and get a 481a tax deduction in 2020. However, does the fact that they were NOT a RE Pro in 2019 impact the ability to use the deduction to offset non-passive income in 2020?

Is it possible to find a fixed interest rate + 10-30 rate term + 25-30 year amortization + mortgage on multi family properties? I noticed Fannie Mae has loans for properties with loans at $1 MM+. What about properties under $1 MM? 

I have only found 5 year fixed rate terms in my area. 

RE #3 above... Knowing that the toilet is leaking the floor is soft, this is a safety concern. 

The argument that the landlord isn't necessarily responsible could be made and they could use the tenant's security deposit. 

Wouldn't there be a risk that the landlord KNOWS about the floor risk; therefore, they have some level of responsibility to fix it?

Looking for negotiation suggestions after inspection. Suggested tactics? What should we accept? What should we not accept? Other thoughts? 

We completed the inspection on my first multi-family rental (6-unit townhouse style). Like any inspection, a lot of little things, but here are 3 areas that I'm focused on:

1. All 60 windows have broken seals. The glass is fogged and very hard to see through. 
   1. To maintain rental class/rent levels wouldn't we need to replace the windows? Tenants pay utilities, but it seems like something required to be fixed if there is tenant turnover. Estimated $30k for full building replacement.
2. All furnaces are 20 years old (original to the building). Estimated $18k for total replacement.
3. 2 toilets are leaking and the floor underneath the toilet is "squishy"

This is a class B rental. 4 of 6 tenants have lived there 5+ years. 

This was an off-market deal. We agreed to 5% less than the listing. According to our buyer's agent, the market is very hot so opportunities don't stick around long. He's the reason we had access to this property.

Hello Real Estate Analysts!

I have $50,000 to invest in real estate.

Question is: What if I rented out my personal residence for at least the next 3 years? Then used the $50k toward downpayment to buy a new personal residence.

When analyzing this situation, it seems like MIRR is the best calculation. If you don't agree, please tell me the better calculation. If you agree…

Should my “Initial Investment” for the calculation be the $50,000 I earmarked to invest in real estate? Essentially ignoring all the equity in my current residence?

If I use the $50k to buy a new personal residence it is not going directly into the investment property. If I rent out my current residence, I want to buy a new personal residence. 

The alternative is to sell my current residence, use some of those funds plus my current savings to buy a rental property + new residence. Which I would run the MIRR on that decision to compare it apples to apples.

Question is… am I thinking about the use of this $50,000 correctly? What am I missing?

Here is my situation:

• Cash to invest: $50,000
• Personal residence: $300,000 Zestimate 
  • This seems high to me, needs a new roof in 1-3 years, Water heater/softener, and HVAC is 14 y/o but it’s a hot market in a hot location so who knows!
    
    • Loan balance is $175k at end of year 3.
    • Assume sale price is $300,000 in year 3. 6% commission paid.
• Projected Gross Rent: $2,000 per month
• Projected CF Y1: $6,000 (DIY PM, 0% vacancy)
  • 0% vacancy is to keep this simple. Will beat numbers up later.
• CapEx: ~12,000 for roof in year 2 (quoted); HVAC ~8,000 (estimate); Water ~$3,000
  • Total $23,000 w/in next 3 years
  • Not considering tax benefits of these. Yes, there is recapture in year 3, but TVM for the immediate expense under the new law should add more value TBD later.
• Calculated MIRR =

Thanks for your help!