All Forum Posts by: Pratap Koppula

The Tax and Accounting rules applies without regard to the Size. If you are dealing like inventory, buying and selling, you may not needed to capitalize, else you need to capitalize.

The interest on Construction loans are added back to the Property as Capitalization or other similar conditions applies. Customer segments are key in determining the scoping of the application, and you can keep on building. 

Wish you all the very best. 

Cashflow has better predictability and you have more control on the internal factors to limit the loss. A better cash flow definitely earns its appreciation, while the appreciation alone is highly unpredictable and volatile.

Cashflow is the cause and appreciation is its effect, in an Accountant's view.!

There have been multiple valuation methods and appears you are focusing only on Fix and Flip (ARV), or new constructions which requires capitalization rules, recording the actual costs. However, the statement valuing any Property in US is misleading.

Rental Properties are valued based on Income while investor returns are measured with either Income or financial modeling tools such as Net Present Value (NPV), and or Internal Rate of Return (IRR).

You need to define the intended purpose of the valuation, limitations that applies to your data modeling.

The valuation, number crunching is a tip of the iceberg and there have been so many demographic, judgmental factors that significantly influence valuation. You have to have a place holder.

Overall its a good initiative but I sincerely believe you are missing a financial analyst so far what I see.

The terms need to specify whether the Management Fee is based on RENT or COLLECTIONS. When the things sail smooth, these little words does not sound differentiating much, but in the difficult times like this, stops that extra nerve from bleeding.

At least one third of the businesses will not survive post COVID and being a small business we have to adopt to terms and renegotiate rather rigid .

Koppula, CPA

The savvy businesses are run on efficiency and analyzing different variances brings the insights needed to make the critical decisions. In the Rental, we often hear the vacancy loss, but there is another gain/loss, that can influence Loss of rent, i.e., rate efficiency.

See below illustration on an annualized rental loss.

To have this efficiency, have to track planned rent and compare with the actual rent for days actually rented.

This is a proven methodology across the industries, and immensely helps in planning, tracking, and controlling the loss of rent when meticulously executed – The data speaks loud and clear, build the data, PLANNING is the KET to CONTROL.

The City of Los Angeles opened the $103 Million fund for renters assistance program. The tenants income need to be below cretin slabs and the rent will be paid to landlord on qualification. 

The program Applications will be accepted from Monday, July 13 at 8:00 AM through Friday, July 17 at 11:59 PM and expected to run out very quick. Please share with your eligible tenants.

https://hcidla.lacity.org/

Multi-State is a common phenomenon and you can hire one RE CPA for ease of communication and follow-up. See if you can spend more than 800 hours to leverage your Real Estate Agent license to produce income and to offset expenses against income.

Wednesday 11am, who all would be able to join. Please share email.

Lets connect if we can get that deal can be done.!

If the legislation gets through, no debt will be accumulated for the tenants for next one year and the rent will be paid by Dept of Housing and Urban Development. 

The key point to note here is the recent proposals for (i) Payroll Protection Program (PPP) (ii) SBA Economic Disaster Injury Loss (EDIL):

(i) PPP loan of 650Bn the Congress vested the discretionary power to Banks under writer and they have given based on the their Clients balance on the line of Credit. Out of 10 loans we applied for PPP, only 3 loans got approved who has good bank relations.

(ii) We applied around 20 SBA Economic Losses, the Initial proposal was to help with $10K as an advance that can be waived for payment. Nearly 30M small Businesses applied for $350B fund and most of the Small businesses got a $1K or $2K depending on number of employee upto a maximum of $10K. Only half of the 20 got funded so far.

The reason why we are sharing the information is, the relief funds are not actually reaching the most impacted businesses.

How is your rent collections, reserves and contingency plan.?

If we buy the Property now, do we need to contingently reduced the price for next one year rent discount.?