All Forum Posts by: Chris M.

Hey guys, so we are changing our LLC to an S Corporation for our business entity type this year. We were likely going to do this in February of this year, 2018. My questions:

1. Does changing from an LLC to S Corp affect 2018's taxes? Will each day of 2018 that we still operate as an LLC be taxed differently than when we change into an S Corp? Unfamiliar with how this works for a taxable year. Guessing the entire year is treated like we were an S Corp the whole time once we change entity types.

2. I know there are more hoops with an S Corp like corporate meetings, reasonable salary etc... but is there anything you guys can warn me about with an S Corp that we should be prepared for? We are operating in the state of Oregon.

3. Any other advice you guys have on changing from LLC to S Corp would be a huge help.

Thanks all and happy new year.

Hey guys, I'm narrowing down my hunt for a 3 bedroom foreclosure for ~130k with ~20k needed in repairs. My plan is to move in, rehab then house hack it for 1-2 years before refinancing and doing it again. This will be my first house.

I've been reading Brandon's The Book on Investing in Real Estate with No (and Low) Money Down and it got me thinking: would it be smarter to seek out private lending over using an FHA 203k loan for this purchase?

When I broke down the math between a FHA loan with a 5.05% interest rate and a private lending interest-only loan of 10%, it looked like private lending would still result in less money-out-of-pocket.

So my question is this: if you guys had the choice between a FHA 203k loan or a private lender who will do interest-only with 10% and 24 month balloon payment for your first house (~130k 3 bedroom with up to 20k in repairs)... which would you choose and why?

Greatly appreciate any feedback you guys can provide on this and hope everyone is having a nice weekend.

Hey guys, I'm wondering if anyone can refer me to a talented investor-friendly agent located in the Eugene, Oregon area that is willing to work with new investors. I'm looking to purchase my first home this year and would greatly appreciate any referrals you guys can provide. Thanks all and have a nice Sunday!

I find this post very interesting because here in Portland OR the market seems to be cooling as well. It's clear people are having more trouble selling their homes and prices keep getting slashed. Like you guys said it's often local, but I've heard a lot of talk of markets "cooling" lately. Perhaps a dip in the market is coming. 

@Matthew Schroeder do you need a real estate license to access the AAMD data? I'm interested in accessing similar here in Portland.

Just wanted to chime in, thanks for the interesting post!

Thanks, @Louise A., from all of the feedback received it definitely sounds like it would be best to do any common area/bedroom rehabs before renting out the rooms. My main concern is that since this will be my first house/rehab experience, it'll likely take me longer to fully renovate the house than I think. 

However, I will be primarily looking for a house that only needs 10k - 20k cosmetic repairs... so as long as I'm careful and get proper house inspections, hopefully I won't be in for too many nasty surprises during the rehab phase. 

Basically trying to find a balance of a house that needs some repairs where I could really add some value, but doesn't need so much work that I'll get consumed as my first deal.

@Jake Thompson I think that's a smart strategy. Something I could do is Air BnB in this way: put 1-2 of the bedrooms on Air BnB as I rehab the other rooms to get some extra cash flow coming in during the rehab period. Guessing there are some rules on this with Air BnB but hopefully if the rehab is consolidated to unused bedrooms it won't be an issue.

Basically trying to approach my first house/deal as intelligently as I can. Mistakes are inevitable, but with the BP community, podcasts, books... I can definitely minimize my mistakes in an effort to make this first deal a true success. Thanks again for the feedback guys.

Hey guys, right now my plan is to get a 3-4 bedroom house that needs maybe 10-20k in mostly cosmetic upgrades/repairs. This will be my first house and I plan on living in it for ~2 years. Thus, after I buy it I was hoping to immediately seek out 2-3 roommates to house hack as I rehab the house.

Here's my question: have any of you run into trouble when rehabbing a house when you have tenants/people living in the house?

Obviously if a bedroom needs some serious rehab I'd do that first before renting it out, but I'm wondering if doing something like rehabbing the kitchen with people living there is a bad idea. Is there a liability risk? Other things I should be aware of before I attempt this? As my first house I feel like rehab might take me a while, this is why I'm planning it this way.

Thanks to anyone who can offer wisdom about house hacking/renovating a house with tenants actively living there.  

Hey @Chris Mason good to hear from you. By self-employment friendly local lender do you mean a person/entity that is not a bank/credit union? Like private lending? Just wanting to clarify.

Thanks, Adam, good to know, appreciate this.

I'm trying to figure out how to approach my 2016 tax return. It's looking like I should write off as little as possible if I want to get a house this year. Basically, if I can show somewhere around $60,000 income for the year of 2016 it sounds like I could get approved based on the income requirements for a mortgage payment of roughly $1,800/mo with my other debts (not many). 

The problem is: if I do this I'll be paying Uncle Sam a lot more in self-employment tax (I'm self-employed). But I've heard that you can amend your taxes after the fact to write off the expenses later... is that true?

Also: @Adam Drummond you said roughly 42% of my gross monthly income... do you think local credit unions would be a little more flexible on that?

Thanks again for the information!

This helps a lot, @Adam Drummond thank you!

Hey guys, I've got a question about income requirements to get approved for a FHA loan. I'm planning on purchasing a $250,000 house with a 30-year-fixed FHA loan with 3.5% - 4% down. My goal is to have a monthly mortgage + PMI + taxes/fees etc at $2,000 per month (max of $2,500/mo including utils and repairs).

I'm guessing it sort of depends on which bank I'm applying at for the loan, but are there some basic universal income requirements for a FHA loan like this?

Thanks guys, I'm working on improving my credit score, but the income requirement part is what really has me worried. Hope I can make this work and thanks for any information.