All Forum Posts by: Andrew P.

Thanks everyone for the advice. @Drew Sygit my understanding of the Trump tax bill is accelerated depreciation for capital improvements so definitely no fudging going on in that sense. Additionaly, there was already the de minimis rule as well as section 179 before the law was enacted. I do not know if I would consider many years of profit that was reinvested back into the buildings "bad performance" on my part but to each their own. 

It appears depreciation was used to look at the numbers which is what I was arguing with them but will instead just look at various other banks. I think I am now leaning toward the cashout refi route after all of this.

@Andrew Postell I work a 9-5 which makes it more confusing. My thought is they are just following specific rules set in place by Fannie/Freddie. If you or @Alan Lacey know of companies willing to serve HELOCs based on cash flow/debt service, please let me know. 

Additionally, does anyone know if I would face similar difficulties if I instead went for a cash-out refinance?

Yes @Andrew Postell I am seeking a HELOC on the current 3 unit property that I live in one of the units. My past tax returns are showing my properties as not cash flowing as well as I am actually cash flowing, making my DTI too high. Know of any places that accommodate someone in the situation I am in. @Kevin Romines that is great advice. I didn't think of the possibility of future rate increases as affecting my possibility to get the HELOC. What I have learned from this and what you have pointed out is the need to spread out my repairs and improvements over the years instead of doing them across 1-2 years.

As the title says, I am struggling to get a HELOC right now. I have 3 properties, all cash flowing really well (yes, I am including vacancy, repairs, and funding a CAPEX account). However, as a result, of my tax forms the past few years, the properties are showing a loss. Underwriters seem to run what I think is a dumb formula because according to the my accounts, the buildings are doing really well.

Depreciating has reduced much of the income and probably just as big, I have put a lot of money back into my buildings to improve cosmetics and efficiency while modernizing them somewhat. As a result, I wrote off these expenses, with the knowledge that it pays for itself over a few years because of the increased rent. Anyways, this is a long way of showing that I am looking for advice, perhaps lenders who are willing to look past what the property income is on paper and hear out the narrative I just explained advice. 

One of the many advantages of real estate is its tax advantages. However, it seems like these advantages are better when you are starting off but when you accumulate more properties and are looking for lines of credit, refinance, or loans on new buildings, those tax advantages come back to bite you by making your DTI ratio to high for many banks. What does everyone do in these situations to continue their growth?

Thanks

Great info, thanks so much for your hard work @David H.. 

Hey everybody,

I had a tenant who I had to let vacate her lease early because of the inability to pay. I found someone to cover the last month of her lease but she was still short one month's rent. This occured last February and is approaching 1 year. She has since paid me back 1/3 of the total rent but is claiming she is unable to pay the rest and has other bills and is declaring bankruptcy. What actions do I have to recouperate the rest of the payment. She has since moved out of state and the property is in Chicago, Illinois. Am I able to put some sort of lien or remark on her credit so I can get paid back if and when she declares bankruptcy? Since she moved out of state, what motivation does she have to actually pay me back and what forces will actually make her pay me back, if any? Any suggestions would be helpful!

Hey everybody,

I had a tenant who I had to let vacate her lease early because of the inability to pay. I found someone to cover the last month of her lease but she was still short one month's rent. This occured last February and is approaching 1 year. She has since paid me back 1/3 of the total rent but is claiming she is unable to pay the rest and has other bills and is declaring bankruptcy. What actions do I have to recouperate the rest of the payment. She has since moved out of state and the property is in Chicago, Illinois. Am I able to put some sort of lien or remark on her credit so I can get paid back if and when she declares bankruptcy? Since she moved out of state, what motivation does she have to actually pay me back and what forces will actually make her pay me back, if any? Any suggestions would be helpful!

I recently decided to replace many of my windows in one of my multi-unit properties and I went with the contractor's loan company (AquaFinance) to pay for the windows. All in all, I spent 12k on the windows with a 9% interest and by the end of this year, I will probably have paid almost $600 this year in principal and interest. Am I eligble to write off the windows and if so, in what manner? Do I write off the original cost of the windows or do I write off how much I paid the loan company so far. If it is this route, can I write off the principal and the interest? Also, is it normal to expect some sort of tax form from the loan company at the end of the year? Thank you everyone for your help.

Recently had a refinance where the appraisal put my LTV at around 70%. The appraisal was done on January 1st, 2017. I am looking to get a HELOC but the banks I've contacted so far have said that I need to get another appraisal. I am hesitant for two reasons. I do not want to pay for another appraisal, considering I just had less than 2 months ago. Also, I do not want to get an appraisal only to find out that the new appraisal appraises my property at less value than my original appraisal, meaning I just wasted money and now have less money to pull out.

I live in Chicago. Anyone in the area (or anywhere at all, really) familiar with how to proceed. Also, I am looking for banks or credit unions that would give me a HELOC with up to 90 or 95% LTV. Thanks everyone