All Forum Posts by: Michael X.

Thanks for all of the replies. I haven't purchased the property yet just gathering information. I will write this up in the contract as Bill Gulley suggested.

So if the purchase price of this property was 300k could I arbitrarily assign 250k for the building and 50k for the land in the contract?

Is there a certain percent or ratio that I should keep within to make it legit? I assume that the IRS would not like a 299k building and 1k land deal.

This is a scenario that I have not run across before. These numbers are roughly based off of the auditor's website.

A commercial property has a higher land value (100k) than the depreciable improvement value (60k). The building is very run down and could be worth a lot more if it would be renovated and this is what I am planning to do. Normally when you purchase a property you base the depreciation off of the auditor's numbers. So the question is...

How do I increase the depreciable (improvement) amount on my taxes after I renovate the property? Do I have to wait for the auditor to revalue the property of should I just get an appraisal for documentation? If I do get an independent appraisal which I use on my taxes and the next year the auditor reappraises for a different number does the IRS begin to ask questions?

Like any investor, I would like to maximize my depreciation and minimize taxes on the property at the same time. Any ideas? I want to make sure that my appraisal does not trigger any IRS "oversight".

Also, if I plan on renting out the building how do I account for the upcoming property tax increase in the lease before it actually goes into effect? I would hate to write a lease then lose a good portion of the cash flow when the auditor reassesses the property.

Is that something you could do with investor money? Say use someone else's money to buy them then offer a percent back like people do with SFHs? However, I'm not sure if the return on owner financing is good enough to split. Just an idea.

James Martin and Jeremy D.,
What online management tools do you use? Could you explain a bit about what you use and how you use the sites?

Thanks

A 10-12 cap rate is about the best i'm seeing in Cbus in areas that I would want to invest. There are always higher cap rates to be had in more challenging areas of the city.

Looks like we need a BP post that lists good property managers in different states based on BP members USING them. Probably would help out a lot of out of state investors.

What kind of cap rates are you looking to get?

I think that it would be 1) difficult to locate a good deal in a new "vacation like" area 2) manage one house in an area.

Who wouldn't love a house in Cancun? But I'm not sure how feasible it would be for the majority of the investors on BP.

Rich, maybe you can gives us an overview of how you accomplished this?

FYI the gun's caliber makes a BIG difference in the cost of shooting. A .22 caliber you can shoot all day on about $5 and get bored before you run out of ammo. I think that the tipping point is the 9mm. That's about all I want to spend for ammo. It's about $10-12 per 50 and they seem to go fast when the magazines hold around 15 rounds. Anything above a 9mm tends to be expensive to shoot and often you see collectors or enthusiasts with multiple guns going with larger calibers.

Is this a website that you are setting up? Looks like it covers just about everything that I would be looking for and more to get an idea as to whether I should investigate the property further. I wouldn't mind "borrowing" this template ;)