All Forum Posts by: Peter Aldrich

I need an 11th hour assist from my fellow BP members to be sure I am handling a tax situation correctly. The situation: I purchased an investment property in July 2017 for the purpose of renovating, creating 3 units and converting to condos for sale. I creatrd a sI gle member LLC to take title when I pIrchased tbe property. Fast forward to September of 2018 and the project is complete and I sold 1 of the 3 condos in September. For 2018 taxes, I plan to report this condo sale as an investment sold. I will allocate a portion of the acquisition cost and the associated rehab cost to form my cost basis. Assuming this is correct, my question is where to I put all of the carrying costs (mortgage interest, taxes, insurance, utilities) as ecoenses in the LLC? Since this was not a rental property, I am less confident in where to report this. Related question, do I report all of the expenses/carrying cost that were incurred in 2018 under the LLC or do I need to partIally allocate these to the sold unit and save the remaining expenses for 2019 when I sell the remaining 2 units? Thank you in advance for any guidance or helpful tips that you can provide.

@Nick Vought - Based on the info you provided and the strong cash flow, I would consider trying to get an equity LOC on top of the 1st mortgage you already have. I know you said you don't have much equity, but a fresh appraisal with the right bank would likely yield enough equity to get a meaningful LOC. Once that is secured, I would consider using the LOC to fund either the improvements on the other 3 units to increase your equity and cash flow position or to use to purchase another property to BRRR. Even if you still need to use private or hard money on the purchase, that cash from the LOC should allow you to bring enough cash into the deal for down payment or rehab funds. Good luck!

Agree that 2.75% is an awesome rate. Since you have so much equity in the current property, perhaps you should explore a HELOC to then draw from for your down payment. If you get a HELOC on your primary before you start renting it, most banks will go higher on the combined LTV than they would on an investment property. Good luck!

@Jessie Creighton and @Matthew Wright

Jessie - I agree with the comments made so far.  Most HMLs will provide a contingent commitment letter or similar documentation that you can submit with your offer.  Best to meet with a few of them to explain who you are and the type of property you are looking for, so when the time comes, they are familiar with you and can move quick.

Jessie and Matt - I am always looking to connect with local investor.  Also, I lend on deals through my company, Sawyer Street Capital.  PM me if you want to connect or discuss a specific deal.

Hey Nicholas - Welcome to the BP community!  You sound like a perfect candidate for a house hack on a 2,3 or 4 plex.  Agree the market is tight, particularly in Southern Maine.  @Bob Langworthy has it right, be patient, but don't avoid taking action.  You started with 2 great books.  You may also want to check out @Scott Trench's book Set for Life.  It is ideal for your profile.  Hit me up with a PM if you want to compare notes.  I am always happy to discuss the market and offer any support.

You should also connect with @Derek D. who is a wholesaler and investor in the Bangor area.

Perfectly stated @James C.  I have several SFRs in the L/A area.  They are all performing well, but you have to choose wisely in this area.  There are many multis “on sale”, but most of them are not worth the headache.  That said, the rental market in the area has been in the rise the last 12-18 months in large part because Portland and the immediate surrounding areas have priced most renters out of the market so they are pushing north and west of Portland.

Pat - I am happy to provide additional info if I can be helpful.

Large 4 bedroom house for sale.  Includes a bonus room that could be a 5th bedroom.  Natural gas, forced hot air heat.  Offstreet parking for 2 cars.  Small fenced in back yard.  Currently rented for $1,000 / month.  Tenants pay all utilities including water/sewer. Annual taxes $2,400. Some deferred maintenance, but room to increase rent with some updates.

@Tim Jordan Can you provide any additional details.....buy what type of property, any specific towns/cities, investment goals - buy and hold, flip, etc?

Welcome @John Brown!  There is a lot of great info and people out here.  Read as much as you can and let us know how we can help.  Good luck.