All Forum Posts by: Pixel Rogue

Hello everyone,

While we have been in the rental business for many years, we have a new situation on the horizon and interested in pro input on strategy.
We are looking at purchasing a neighbors house as rental. The house needs some serious and expensive upgrades.Here is the question:

Live in our current home, rent out the new property.
Pros: No need to move. Write offs are simple enough.
Cons: No income during upgrades. Upgrades will take time, funds we do not yet have. Finding a tenant would be more difficult, lower rent. Overall expenses w/o income.

Live in new home, rent out of current residence.
Pros: We can work on improvements over time (on our own time, own budget.) 
Cons: Unclear what we can write off as an expense. We would need to move. 

Best of both words:  We live in our current home, find a tenant who is fine living w/gradual upgrades, drywall dust (highly unlikely.)
Next best option: We move into the new home, find a renter for our own home WITH ability to write off upgrades to new home.

QUESTION
Any legit strategies that will allow us to write off improvements to a rental property while we are the ones living in the property to do the majority of work ourselves? Open to any and all ideas. Maybe some element of timing, such as having x# of days/months to change categories, terminology? Maybe do heavy upgrades as soon as possible, then move over new home and rent out our own place? I think there have to be some strategies for situations such as this as this is nothing new.

Thank you for any insights....much appreciated. 

Hello everyone,

We are considering purchasing another home nearby. The place is similar to our own (same builder, similar layout etc.)
If we purchase, the home would need some serious upgrades that will take time.

OPTION 1:  Move into new place, rent out of current home.
We are comfortable moving into the new place, renting out our own home. This allows us to do a fair amount of the work on our own, on our own time, and we are comfortable living through upgrades.

OPTION 2: Stay in our current home, rent out new home. 
We may find a renter for the home at a lower-than-market rate. There are some upgrades we can complete while the tenant is in the unit (projects that you hire a contractor for and they can get the work done in a day or two) but others that are larger and take time to complete. 

Here is the rub:  Our preference is to actually move into the new purchase, rent out our home - HOWEVER - we are not clear how this might work when it comes to writing off expenses. We would want to live in the place (deal w/the drywall dust, painting and all) and yet want the write off the expenses. How can we approach this scenario where living in the new place would be considered 'primary residence' and prevent writing off expenses?  There might be clauses, time periods, special conditions...anything that would help shed light or help plan the right steps?

Thank you Wayne.

LLC Loan: Documents insisting on waiving rights (state: PA)

Loan documents I am being asked to complete require signing away many rights.
Lender is stating this is standard language (purchased standard form etc.LaserPro, Ver. 20.2.20.003)
Basically sign away the enclosed rights or we do not furnish the loan.

Waives include:
- right to a jury
- confession of judgement (two different times (one personal, one LLC)
- guarantor waivers

There is no comfort in a standard purchased form when the standard form requires waiving rights.
Not expecting problems meeting obligations of the loan, and yet does not seem right to waive rights to get the loan.

----
Seeking NON-BANKER input on the meaning and real-world (actual) use and risk of waiving.

** bump **

LLC Loan: Documents insisting on waiving rights (state: PA)

Loan documents I am being asked to complete require signing away many rights.
Lender is stating this is standard language (purchased standard form etc.LaserPro, Ver. 20.2.20.003)
Basically sign away the enclosed rights or we do not furnish the loan.

Waives include:
- right to a jury
- confession of judgement (two different times (one personal, one LLC)
- guarantor waivers

There is no comfort in a standard purchased form when the standard form requires waiving rights.
Not expecting problems meeting obligations of the loan, and yet does not seem right to waive rights to get the loan. 

----
Seeking NON-BANKER input on the meaning and real-world (actual) use and risk of waiving. 

Hello everyone,

We are considering purchasing a neighbors home. The home is deep need of renovation, where our own home has been fully updated. The idea would be to rent out our own home, move into the neighbor's home and upgrade over time. Purpose of the new purchase would be as an investment...rent it out when ready.

The sticking point is an accounting question. Are there ways to upgrade the new purchase while living in the home and expense the upgrades in a similar manner as one would do if the unit were rented out to other individuals? We doubt we would find renters who would be up for renting the unit while upgrades are happening. Renovations might take a few years. I imagine we are not the first to encounter the question and curious what methods people have used in these situations.

Let me know if this is better suited for a different category. 

We may buy a home near by which is in need of renovation. 

Ideally we would hope for a tenant who would be open to renovations while living in the home and that way the expenses are tax deductible. While not all the renovations are major, it could be an annoyance to any tenant... and there would be a fair amount to complete over time.

Wondering if there are other methods that would allow us to live in the home while renovating and benefit from tax deductions as the renovations would be applied to the rental? Might take a few years to get them all completed. In this scenario we would rent our current home out, live in the new one during renovations.

How do EFTs ele mínate tax problems? 

Mix of income and appreciation would be nice. I hear decent income and hear taxes.

We are a few years away. Think of it as a 5 year plan. We are comfortable with risk (market risk) and less comfortable with "partner" risks. 

Maybe this is the time (today +4 years) to get into REIT as we might be hitting a floor in the next six months?
Do you have experience with them, partnerships or the syndicates?

Hello everyone,

Have a number of investment properties and planning to scale down within the next 5 years. All goes well, that will leave a substantial cash sum after all was said-and-done. 

What are some the best investment vehicles for a cash stockpile?
• Mutual funds - yet you are then paying taxes on anything gained for life (even in tax advantage funds)
• Real estate - great yet been in real estate for 20 years... letting go.
• Local REIT? Not as familiar, where you are one of small group of investors in a property? Anyone doing this?
• Open to purchasing a business - yet want something that would not require my involvement daily.

Where does one go next after selling off their investment properties?