All Forum Posts by: Nathan Maier

 How would you justify using 25%/75% if the IRS questioned you? Especially if this is significantly different than your county assessors opinion.

 The IRS. https://www.irs.gov/pub/irs-re...

I purchased a property in California last year for $1,770,000. My supplemental taxes list the "land" value as $1,300,000 (73.5%) and the "improvements" as $470,000 (26.5%). Very round numbers, like the assessor didn't even try. The previous year was $840,942 (65%) land and $446,750 (35%) improvements.

Obviously I want the "improvements" value to be as high as possible for depreciation. 26.5% seems incredibly low. That is well below replacement cost and I don't believe the lot to be worth anywhere near $1.3MM. I've always been told to use property tax numbers on land vs improvements for depreciation, but do I have to? Can I dispute this somehow?

I see you edited from 1000 to 300 doors needed to be financially free. Still, at $100 per door, that means you need $30,000 per month to be financially free? Or are you only cash flowing $100 per door per year? 

Thanks Caroline, I was worried this would be the case. STR in the properties I am looking at is at least double the long term rent, and hitting the DTI requirements with only appraised market long term rent probably won't happen. Is this a hard rule that underwriters are going to be firm on? I understand the VA underwriter guidelines give credit for landlord history. I have 6 years experience as a landlord on 3 properties now that have been excellent performers.

I'm looking to house hack in San Diego with my VA loan benefits and need an investor friendly lender.

Specifically, I want to purchase a 2-4 unit property, live in one unit, and use the others for STR, long term, or a combination of the two. I would like to find a lender who not only works with VA loans, but also understands investors and will give appropriate DTI credit for the rental units, especially the STRs. Thanks!

I wouldn’t be so quick to try to evict these tenants. You said they are keeping the house clean, that is a huge positive. It sounds like you are getting the rent pretty consistently, albeit late. I would collect that extra $35 per month, until the first time they pay later than the 11th. This is just how some people deal with their finances and responsibilities. They have until the 11th until you can start evicting, so in their mind, that is when they need to pay it. If $35 isn’t worth the small hassle, then you now know you need to increase you’re late fee. If this is all too much of a hassle for you, then consider a PM. 

Focus on re-training these tenants if you need to. Sometimes the extra cash flow of a late fee is nice, if the tenants are consistent and otherwise good. 

@Chase Gibson congratulations! Your first BRRRR doesn't have to be a home run. I suspect after expenses and reserves your cash flow will be pretty thin, but you have gained equity and most importantly, experience!

That is awesome that you were able to refinance immediately. Any tips on how you avoided the dreaded 6 month seasoning period?

Lend it to real estate investors. It’s passive, and think of everyone you will be helping. The investor, the agents that get the commission, the contractor and his employees, the property manager, the tenant, and everyone in the neighborhood by taking a distressed property and turning it in to a great rental! 

What does over leveraged with money even mean?

@Thomas Van aken I thought “Van” was your nickname! All kidding aside, I’m glad you are making it work for you. $200/sqft is cheap!