All Forum Posts by: Gp G.

Hi,

How to choose good Qualified Intermediary. 

What are various factors I need to consider to be safe side with lot of money. 

Does Qualified Intermediary supposed to provide all the insurances, also account details where they are putting money?

Do they keep money in FDIC insured accounts right?

I saw some Qualified Intermediary charge more some less and some no charge as well.

I am trying to find good qualified intermediary at reasonable price and same time safe with whole transaction and responds well.

Please advise

Thank you. I heard about depreciation of property but not depreciation of repairs made. How much I have to reduce tax basis if I consider the depreciation of repairs? Math is getting complicated. About 50% of repairs i did from small handymans who did not provide bills/invoices/reports/statements etc. Does that also impact whether I choose 1031 exchange route or not. What is meaning of tax basis. Also I do not know that  mortgage cannot be considered for 1031 exchange as well.

Seems to me like 1031 exchange is more advantageous for free and clear properties without much repairs. 

How I show the repair costs I made? Tax return document is enough for this purpose? Do I need to provide repair bills to any one? Please advise

Hi ,

I bought a property around 140k around 6 years back and considering now selling around 350k. I spent so far about 30k each year on repairs and upgrades which was reported in each year tax returns (2024 tax return yet to be filed where  I spent around 30k again).  I still have mortgage with a bank for about 110k to pay. I also have about 80k debt on credit cards which I used for repair of this property. Is it worth doing 1031 exchange in this case or just pay taxes like capital gain taxes and normal income tax on the income.  If I do 1031 exchange how much I can save by going through these additional steps. Please advise

Thank you very much. My reporter not providing profit loss , balance sheet etc.

I just have tax return from him.

I searched on key word 'repairs and maintenance'

I see 21 item is  'repairs and maintenance' then it shows under Schedule C but value for that field as 0

It says under art V of Schedule C 'All the rental properties in SCH E'

Not sure if any issue there

Hi,

How to find whether my tax preparer putting all expenses of repairs, upgrades of rentals under capex or opex. Which approach is better. What are best practices around tax submissions. Any good links, resources, material around this? Please advise

Hi,
if I sell a property how much amount or percentage I loose in taxes.  Please advise

Thank you for your amazing inputs. Some of the repairs I did were from handymen or small contractors who do not have an invoice system or estimate on paper for cash payment like painting and rent ready repairs. Those will be hard to show in documents for 1031 exchange as well. I am meeting one realtor today to get a better idea and opinion whether to sell or hold. If I get 350k or above I am thinking of selling, which is kind of break-even price forgetting all the time and effort I put there.

Hi All,
I bought a single family converted duplex 136k from a wholesaler  and spent 200k so far as I did not get opportunity to do proper due diligence. 

Area is appreciating but lot of challenges with this property like below

1. Bad rain drainage issues which i resolved by building French/trench drain on side and back by spending 10k

2. Rain drainage water used to sit in crawlspace and did crawlspace water proofing for about 10k. 

Still see sump pumps in all corners get some water from sub surface not sure where it gets it.
3. Septic field lines failed in backyard and installed new small Elgin septic fields in front yard between drive ways and put a motor and dozing tank to collect from both septic tanks and pump through crawlspace for 30k 
4. Upgrade electric both sides for about 30k
5. Upgrade floors kitchens and bathrooms etc 20k
6. Fix roof mold issues like 10k

7. HVAC move to attic to replace package unit and other side replace fan and heater for about 20k

8. redo plumbing work 20k

9. spent 10k to fix sagging floor issues by putting concrete blocks in crawlspace.

There is big neglected strip mall in back as attached with loud noises and some weird smell of tobacco etc. also has big dogs barking at people even if I go to the corner of my backyard lot.
There is one bad neighbor who has big dogs always barking who elevated his backyard and rain water runs naturally towards my side

Big trees other side in neglected waste land which I think belong to strip mall owner behind and city also pushing some rain water in to that waste land.

I am in dilemma now

1. My current PM (say PM_1) does not sell my property as they only do Project management with whom I am there for 5 years now. If I terminate lease with PM_1 for this duplex end up paying commission of one year on one side tenanted unit and 250$ for other side vacant unit.

3.  new PM_2  says he can sell my property around 350k even it is under PM_1. Is it good idea to keep property management with PM_1 and sell with PM_2?

4. new PM_2  says since PM_1 did not advertise properly and not taking prospective tenants calls and taking long time to rent now. PM_2  promise he can rent in 21 days for 1350$
5. I am not able to decide selling is good idea to avoid big ticket repairs which puts burden and not sure when I get what repairs  on this 1961 crawlspace septic tank duplex with rain water drainage issues etc.

If I can some how absorb all these crazy repair costs and contractor challenges it will definitely appreciate in next day 5-10 years (already new built sfh and townhomes selling in this area around 400k-500k) then I can probably sell as I did most of the hard work already and brought up to good shape compared to what it was when I bought.

Also I see big trees next to unit as seen in the attached photos which concerns me that if they fall on roof (which might be baseless fear). Please advise.

Also behind there is retention wall belonging to the strip mall owner (who does not care for my concerns as per my talk with his property manager  few years back) where I built back french/trench drain which is leaning towards my property side which I am concerned may collapse.

6. PM_1 said his other friend broker can list for sale but not himself which i am not sure a good idea.

7. If I move to PM_2 can he list for sale and also same time for rent (which he confirmed yes) ? 

If I get 350k or more is it good idea to sell at  breakeven price after owning 6 years now ?

or get good tenant for around 1200$ on vacant unit (i reduced rent from 1350 to 1200 as not much interest in current market) and hold few more years absorbing repair costs and contractor issues, trees issues, retention wall issues, tough neighbor issues, loud music, tobacco etc. smell issues, dogs barking issues.
7. So far last 5 years with PM_1 provided overall decent experience but not like excellent or great especially after mergers with big companies.
8. If PM_2 sell this duplex he said he charge 4% . 

If PM_2 sell for 350k how much percentage I have to pay in taxes?

If I do 1031 exchange can I  save on  taxes ?

PM_2 agent says he can take 2% while buying new property in 1031 exchange as buyer agent

Please advise on these confusions

Hi, I had a painter who seems inexperienced who painted my house( referred by one other good handyman who gave up after taking half advance saying he got big projects cannot do these small jobs). He put paint on wooden floor and walked with paint shoes all over the property caused white marks and shades on the nice costly wooden floor. He also put paint in bath tub which I have to change with new bath tub  as well. Any way I can remove the paint from wooden floor? I tried some solutions and steam approach around painted area to scrub based on online searches but did not help completely. I took help from one other handyman who scrubbed still did not help completely. Anyway I can remove paint without have to spend money on putting new LVP in all the rooms covering about 1000 square feet. Please advise

Thank you all for your great feedback