All Forum Posts by: Pratap Koppula

With no guarantee of certainty, understanding your goals and taking calculated risks are key to success.

Loan-to-value is a lender criterion that has a significant influence on interest rates and 70% is a safe bet for banker on mortgage.

In this buyer's market, it may be difficult to get the desired price if the appraiser assesses the value to be less than 260K.

Additionally, the cost should take into account the time you spent on the project, which is a significant factor.

Welcome to multifamily! If you need any help with the financial due diligence of the deal you're interested in, feel free to ping me - I'm here to help.

The distinction between Cash on Cash and Cash Available for Investors should be made clear. 

Cash on Cash is calculated by taking the Cash Profit (calculated after mortgage interest, but before Principal reduction) and dividing it by the Cash Invested.

Cash Available for Investors is calculated by subtracting the Principal portion of mortgages from the Cash Profit. Principal amount portion is not an expense to reduce from Cash Profit.

The IRS expects us to track all expenses by category and capitalize any expenses that add life value to the asset. This means that these expenses will be added to the purchase price and depreciated over the asset's lifetime.

Certain improvements to a single-family residence may be depreciated if the property is held as an investment. These include:

1. Structural improvements to the home, such as additions, framing, or other improvements that are permanently affixed to the home.

2. Appurtenances to the home, such as fences, driveways, and other outdoor features.

3. Electrical, plumbing, and heating systems, including air-conditioning equipment.

4. New roofs, windows, and other improvements that increase the value of the home.

5. Home office improvements, such as computer equipment, office furniture, and other related items.

The depreciation period for these improvements is typically based on their useful life, ranging from three to 27.5 years. The deduction is taken over the course of the depreciation period, and the amount of the deduction reduces the amount of taxable income.

Investing in RE requires planning, execution, and measuring of results. Here are the essential elements of your financial planning: make sure you consistently check every box to stay on track.

Principal portion of mortgage does not need to be added to your COC calculation. Please send me your model to validate, or I can share a sample template, ping me.

Having only a General Accounting System, such as QuickBooks, may not be enough for a business to succeed. Hours of labor would be required to measure Real Estate (RE) Key Performance Indicators (KPIs), as well as to track Operations and Financial results. RE focused systems is the best option.

You have come to the right place! The lessons you learn here are unique and unparalleled.

Balancing emotional intelligence with a sense of financial responsibility is key to achieving success in any business endeavor.

If you need help with financial analysis, ping me. I'm more than happy to help!