All Forum Posts by: Nathan P.

The new Bigger Pockets Book on Tax Saving Strategies was an entertaining read ironically.

They stated in there that in order to write off business travel you just need to have predetermined planning documented somehow in your email or even texts probably. For example an email to your property management company dated pre-departure or something.

Another thing that the book stated was that the IRS tax code uses the words "ordinary" and "necessary" for expense write offs. 

It sounds like you are taking all of the necessary actions. In the event you ever got audited you could probably even show this post as evidence.

Hi Jenny,

I was interested in your post because I live in the area so I just wanted to add my opinion. I am assuming your end goal is to sell the house and get the higher end value.

I would recommend that you talk to a title company about structuring an owner finance deal (I go to Tucker Hodgson at Backman title on main st in Bountiful). Essentially this is a lease option structured slightly different. Instead of doing a option fee you require a down payment. Then allow the tenants to make payments to service your mortgage have them pay you monthly at 5.5 or 6% over 30 years and a balloon in 2, 3, or 5 years.

The reason I reccommend this is that because you charge a higher interest rate than your paying you will get the spread and will make up the difference in price. Second your tenant will be able to refinance at the balloon a lot easier than they will be able to go get a mortgage at the end of the lease option. Your odds of selling the house go up a lot with the former option.

Nice work Ben it looks like you dissected this one pretty good. Sounds like it was an MLS find is that right?

I am also interested in affiliating with a CPA that actively uses "bifurcation of assets" a term I only have minimal knowledge about but understand can be very easing on the short term tax burdens of buy and hold assets. If anyone in the market can connect us with someone like that I think there would be a lot of value to be had.

See you in the ditches @Patricia McPherron

Hey Zander I saw one of the "experts" post on here that there are two types of insurance to get on short term property investments. Title insurance Hazard insurance Something else to consider is insured contractors which will relieve some of the possible liabilities for injuries on your property. *Following this discussion for others input

Hey @Daniel Howard first off lets meet up sometime for lunch we are both in North Salt Lake and in the same stages of investing.

I have done some similar research and was looking at getting in contact with Boardwalk Capital. They are on the list of Hard Money Lenders for Utah and will do up to 100% of purchase as well as fund the rehab as long as it all meets the terms obviously. 

A contractor in my market told me the other day that he uses the following tool to roughly estimate rehab costs before he actually goes and itemizes everything needed on a rehab.

$10 sq/ft-carpet, paint, blinds, cosmetics, etc.

$20 sq/ft-carpet, paint, blinds, cosmetics, bathrooms, kitchen, etc.

$30 sq/ft-carpet, paint, blinds, cosmetics, bathrooms, kitchen, roof, cement work, etc.

So basically he grades the property 123 (abc) and the applies the cost per sq/ft to the total square footage of the property.

Does anyone else use a similar method to help them save time analyzing deals and focus on deals that look more appealing? I am interested to hear other variants and methods you are using as well.

You may be indeed correct about heloc on rental properties but its worth shopping out. It seems that financing is getting softer. They may do it with just a lower LTV 60-70%.

If they wont give you the HELOC I dont see why they wouldnt just let you open up a secured line of credit with the duplex being the collateral

@Blake Chapman

My personal favorite vehicle for leveraging a property is a Home Equity Line of Credit. Then you can use the funds on demand as needed maybe start with the 40k renovations on your duplex and then have the rest of the credit line readily available to get the large multi-family you are looking for.

I dont know the location of your duplex in California but $925 for rent per side seems reasonable and there may be room for rent increases. Research the locate market for current rent prices. Lets say you invest the 40k into your duplex and it allows you to raise your rents by $150 per side yielding you another $300 per month and $3600 per year.

3600/40000=.09

Is a 9% return within your goals? Also consider the forced appreciation on the property that may allow you to borrow even more against it in the future.