All Forum Posts by: Ross Y.

I'd recommend using a HELOC or 2nd position loan over a cash out refi. By doing a cash out refi, you're resetting the 1st position interest rate (probably higher) and adding PMI with high closing costs.

I recently did a 95% LTV HELOC… that might work for you. The interest was high (8.5). But I'm using it as a temporary line to acquire new and upgrade my existing portfolio. My plan is to secure permanent financing on each asset improved or purchased to replenish the HELOC.

Good luck. 

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Hi Team! 

Im finalizing negotiation on a property and taking on the tenant but in the agreement  I’m requiring that the notice to vacate be served to the tenant based on the just cause reason of the sale of the property. Im on a 21 day close and the notice will state 60 days to vacate but the transfer of ownership will happen during the notice period. Does anyone know if the just cause reason will survive the transfer of ownership? IE, if the tenant decides to fight, can I use the previous owners reason to evict? 

Thanks in advance!!

@Ross Y. We have 9 rentals… left that part out! :)

@Taylor L. And all…

Thanks for the input…. Here are a few more details.

Writing from my phone so it might be a bit fragmented! Thx!

I have not filed as real estate pro in past but my wife would qualify as she does all of our management and assists with our transactions. She does not show any other income against her social. We have rentals and we're focused on growing. My CPA is also having us set up an s-Corp for additional write offs such as paying our kids to help with things in the RE and consulting business, putting our vehicles in the Corp name, etc. we're putting our multi families in an LLC which will be managed by the s Corp and our primary in a trust. Topped off with an umbrella. We're trying to get our sh*t together financially for the future and crazy tax laws that are going to hit soon.

My primary career for a publicly traded company has done well and my CPA believes that our real estate portfolio with RE pro status and acceleration of cost seg could help offset the stock income so I don’t have to sell a bunch of it for the tax ramifications. We specifically found an older building with a high tax value over the land for this purpose.

Lots of moving pieces here. :)

These strategies are all new to me and I wanted to get some collective thoughts from the team!

Team,

I’m entering into a new realm with investing and looking to offset other sources of income with cost segregation combined with accelerated depreciation from real estate professional filing status.

If the losses exceed my real estate income, can they be applied to other income sources. IE consulting, stock grants (RSU’s), straight W2 income?

I’m closing on a multi this week with DP from a 1031 and we think the accelerated cost seg will help with tax liability on those other sources.

This is my first time considering these strategies I’m being led to by my CPA. Can someone provide some insight?

IE… 200K stock income (treated as normal income), 200k w2, 50K consulting. 450K loss from cost seg

@John Warren. I agree. Thanks for the confirmation.

@Bjorn thank you!

@Dan Heuschele. Thank you! PMd you

Team!

The BP community got me started house hacking 5 years ago and now I’m up to 9 doors with this one! Thanks!!

I’m under contract on a 4 Plex in San Diego area. I was looking for some collective thought on my approach to get this property up to market rent. After walk through, I believe my best option is to give a 60 day notice upon closing. Once tenants are out, renovate, and re-rent. See factors below.

- Total rents are roughly 2500 per month under market.

- current rents will not cash flow. PITI capex 4800… rents total at 4500.

- each unit is over occupied; one 2 bedroom has 8 occupants with beds in living room etc. lots of poor tenant improvements… extension cords coming out of windows, sheets on windows, etc

-fairly nice area

- property was mismanaged and is quite sloppy. Lots of junk, too many cars parked there, etc

- the tenants are friends/family of each other

-estoppel agreement showed that none are US citizens. Language barrier is difficult.

-cosmetic renovation needed on each unit. One needs kitchen renovation

- I have reserves to cover costs.

-I’ve tried to raise rent to market on tenants in past RE purchases and it’s always been a PIA and they move anyway.

-will probably offer cash for keys (Ill have all their deposits through escrow)

- my 1031 clock was getting close and I needed to get into this property for the tax savings… the numbers work but it will take a little TLC to get it up to market.

-this is a long term income property for me.

- I self manage.

@Mario Morales

I’ve lived this scenario and it didn’t go very well when I let the tenants know I was raising their rent by 40%.

I tried to reason with them, etc. turned into a bit of a mess. Nobody will be happy about this and you’ll have a pissed off tenant that won’t help you with ANYTHING.

I should have known!

As they say, hindsight is 20/20... so

I would have approached them stating that I wanted to perform renovations to the place and asked them to leave with a 30/60 day notice and offer their full deposit back so long as they don’t damage anything on the way out. Take video!

Follow that up with a letter/email, and move on with new tenants. Rental markets are hot right now!!