All Forum Posts by: Peter Doan

Thank you @Theresa Harris

Thank you very much for the advice @Craig Sloan @Shane Ussery.

I was worried about the deal but it seems like I have a courage to proceed with the deal. I will keep everybody updated how thing is going with the deal.

Thank you everyone.

Peter

@Kenny Dahill Thank you very much for your reply. It is very helpful for me mentally.

Hi everybody,

I recently found a property listed below 15% of the market price. The house is listed for sales at 320K where as similar houses in the area are about 360k. The previous owner the house passed away peacefully in the house 4 month ago because of cancer. 

I wanted to buy the property, fix and rent it out. I have never purchased a property with previous owner died in a house before. 

Does anyone in this forum purchase house like this before. Based on your experience, should I buy the house? Would it be hard to rent out the property?  

I am thinking if I buy the house then I can put the rent price to be lower than the normal price but I am not sure if this will help.

Thank you very much for the help. I am looking for the advice.

Peter

@Andrew Smith @Casey Murray Thank you very much for your valuable input. I like the idea that you add up things into the property and someone is paying it for you. Depreciation is definitely  a huge plus.

@Lucas Weismann @Jim D. I am think about adding a solar system on my rental property. However my CPA told me that since it is a rental property, I may not be able to get federal for state tax credit. She seems not really sure about that. Do you know where can I find that information?

Thank you,

Peter

@Casey Murray

I recently got a special offer for a solar system from Tesla. System will generate about 90% of the energy for the house. It is a lease system with 20 year term, with no buy option. The monthly payment is $57 every month for the first year.  There is no downpayment. Tesla will do 2.9% annual rate hike.

Tesla provides real time monitor of the system, which requires high speed internet setup for the house so that they can send usage data back for monitoring. Since this is a rental duplex, it seems like I have to setup an internet system just for power monitoring. This will add to the monthly cost of the electricity. Do you have to do something like this for your solar system or you just skip it?

Also the lease of 20 year is kind of long for me because I actually do not know if I will keep that property that long. Any advice would be appreciated.

Thanks,

Peter

Hi Casey,

Thank you very much for the advice. Yes, I think going with solar would be less capital intensive and less effort.  Legalizing a duplex will take much time and effort, especially to satisfy requirements of city

When you did your solar, would you be able to claim 30% of the tax credit. I did some research and found the following articles mentioned about this topic. It seems to me 30% tax credit is applicable for rental property but must be claimed as either business expense for home improvement or using a special code (48(a)(5)(D)).

https://ttlc.intuit.com/questions/3935509-i-rent-out-a-home-and-added-solar-panels-since-i-don-t-occupy-the-house-not-eligible-for-the-30-solar-tax-credit-can-i-reduce-my-expenses-as-a-property-improvement

https://www.irs.gov/pub/irs-pdf/i3468.pdf

Hi,

I recently bought a house with an in-law unit. The size of the in-law unit is the same size of the house (around 1400 sqft for each of them). Both of them are rented to separate tenants.

Currently the two units share the same electricity and water meter. I charge each tenant $80 for electricity and give them water free.My electricity bills around $400-$500 since PGE charges the high usage (two units combined). The water bill is around $120. Those expenses very much eat all the cash flow.

I am thinking of two options:

1. Legalize the duplex. I talked with the city and was told that the fee I need to pay for the city to make this happen is around $35,000 - $36,000. On top of that I need to fix the common wall between the two units to make it fire proof. So I guess the cost is around 40K totally. The benefit is that I will have separate water meters and separate electricity meters. The downside is that it requires a big downpayment (40k immediately).

2. Add solar panel. I talked with solar company (Tesla )and they estimated an $32,000 solar system would be sufficient for both units. If I go with $320/month I would be able to pay off in 10 years. Solar company will guarantee the solar system works for 20 years. Because this is investment property, I do not get 30% tax credit for solar system as it would applies for primary resident. The benefit of the solar option is that I would not need to worry about high PGE cost. After 10 years, I would be able to get additional cash flow by selling the electricity for tenants. Also I would not need a big downpayment like option 1. The downside of this option is that the house is not legalized as a duplex. Also I would need to take care of electricity and water bills. The water and the electricity will still be shared.

I am not sure what will add the value to the house more (solar system or legalize the duplex and having separated water and electricity meter). Also what is the better option that I should go with?

I am new to the house renting investment and still learning. I would truly appreciate your input and guidance.

Thank you very much.

Peter

@Max Gradowitz My house is in the zone of duplex but the house is the single family house with in-law unit