All Forum Posts by: Jeremy S.

Rich Hupper the 70% rule is a rule of thumb to quickly analyze a deal to determine if it's worth further evaluation. It basically says that your Maximum allowable offer is equal to 70% of the arv minus the cost of renovations. In this case it is: $550k X 0.70 = $385k $385k - $50k (repairs) = $335k The 30% deducted from arv is generally considered to cover the holding and closing costs plus your profit. Hope this helps, again it's a quick way to determine if you COULD have a deal

Also 70% rule says max offer here is $335k... This does not sound like a deal to me, especially not one that can support hard money rates

Something is way off 415 purchase + 162 profit = $575k > $550k arv

It's sounds like the property should cash flow pretty well when all four units are rented and when pmi can be removed. You will need to know your market and look at the value of similar 4-plexs. I would stick with the 4-plex idea, it will cash flow better in the future and interest rates are great right now plus your early 20's is a good time to be living in an apartment. I love the house hacking idea in a 4plex with FHA loan but obviously won't work for an old man like me with a family. I think you are on the right track, just double check your numbers with the bp calculator

What do the numbers look like with pmj? I assume you will be living in one unit with 3.5% down?

@Wayne Brooks Are you saying that my interest, property tax, maintenance expenses and travel in 2015 could be deducted against my other income for 2015?  Would the purchase and rehab cost still be added up this year to determine the tax basis and be listed on my tax return, to be deducted when the property is sold?

You should not be required to unless you signed an agreement. What is likely happening is that your buyer signed an agreement with that agent and they will now be responsible to pay their agent's commission and they are asking you to cover that cost. If the sale is already final, than no you do not need to pay it

I'm trying to get and idea of how this situation will effect my tax bill for 2015. I purchased and renovated a house in fall of 2015 with cash from a heloc on another property. I have had several showings but I am not yet under contract and I do not expect to finalize the sale in 2015. How/when do I deduct my interest paid on the heloc used to purchase the flip? What about the cost of the property itself and all the rehab and holding costs? This property is held in an LLC that has roughly 5k in marketing expenses for 2015 and 12k profit from a wholesale deal. Any input would be greatly appreciated.

There will be a lot of gift cards available in the coming month. I like buying them at 90-95% face value and combining that with other discounts

I have purchased and sold only 2 properties off the mls in the past year and I still feel it was a worthwhile investment. It allows me to pull my own comps and see listed properties on my own schedule. It does make for some red tape and requires you hold yourself to a higher ethical standard. I have found it advantageous to be 100% upfront with sellers about the true value of their property if I were to list it and I also give them my cash offer as well. I think they really appreciate being able to get the facts from one person and more often than not, they take my cash offer. It's a win for me either way if I list it or buy it myself. It does cost about $2,000/ yr for all your dues and everything so make sure you will be using it.