All Forum Posts by: Rick Turman

Thanks @Dave Toelkes!

This makes sense and paints a clearer image. It is most certain I need a new CPA. Its a shame I lost mine as she came down with an illness and passed away prior to COVID.

The reason this rental is in the flipping entity is for the portfolio on the commercial side and was planned to quit claim into personal again for the appetizing rates for conventional lending during the refi. I knew this time would come just didnt know what to do or how to handle it. I need professional help as the pieces are getting more involved and want to do it correctly. Thanks again for the response and I wish you the best on you adventures ahead!

I have combed a few forums but have not found a variant for my questions that I am needing help with.  

I own two duplexes that were purchased in 2019; one in my personal name and one in the business.  Both were in service at the time and being rented.  Construction started on the one in the business within a week of closing while the other has some minor repairs.

Are all fees and taxes associated with the purchase of the property deductible that can be found on the Closing statement? The one in the business name has a Construction loan out on it which I assume I can write off the Interest paid up until 12/31/2019. How would I account for CAPEX and expenses on this property until EOY? I have about 16K in Materials and Labor costs to this point. Would I Safe Harbor those costs under 2500 or should I depreciate the costs involved on a schedule? I have read that I can depreciate the value of the home over 27.5 years which I want to do but at what point do you do this in this scenario? I'm assuming when renovations are completed and Refi is performed, that's the year you depreciate the new Value of the home over 27.5 years correct?

I'm sorry for all the questions, and i've come this far.  My CPA passed away right at the start of COVID and I have been scrambling to find a new one to work with.  I appreciate everyones feedback and looking forward to your responses.

@Obadiah Roszman,

Wow sorry i'm just getting to this now. My notifications didn't trigger the reply for some reason. In response to your comment on letting the 15 year wrap, I could wait for rates to hit 0% or close to it so that I could do the Rate Term, pay for the closing again, and ride until monies have been recouped which would look like 2 years or less from this property then do the HELOC.

As I returned to finish this comment, Rates did hit 0 however they rarely follow behind FED's moves.  Rates were claimed to be 0% but a flood of re-financing is occurring, and 10 Year Treasury just went through the roof.  My guess is Fed is buying their own bonds which is forcing housing rates to also increase to a high we haven't seen since the peak of 2016.  

I may call my Lender to cancel moving forward with my loan package until either A) Rates are back below 4% APR, or B) Debt Jubilee occurs which I feel will come next.

I didn't really expect this discussion to go this route but I may have to Call this round and go back to the drawing board to free up Equity and clean up the mess with some wins.

Thanks again for the response, and let's connect once this virus thing passes!

Looking for some guidance and or advise on how to best approach this. I've purchased a duplex in my LLC almost 6 months ago and just completed the rehab on a 6mo interest only construction note wrapped into a 15yr mortgage at fixed 4%. I got this duplex for a steal and while holding it may have doubled on ARV.

I now have the bottom unit occupied with the upper unit ready to rent. Prior to starting this, I explained to my lender my exact plan and wanted to cash out refi after completion which seemed feasible and was told to return thereafter as there would be zero seasoning. In doing my due diligence with my lender I am now told that a cash out would not be possible unless the title to the property has been in my name as an individual for a minimum of 6 months. (Has been in business name and I am single member LLC for those 6 months does this matter?) That being said, an alternative would be a Rate Term Refi and payoff the existing SB loan.

I understand a Rate Refi would just give me better terms and better rate but I cannot pull the equity out or can I? How can I go about this and still cash out refi? The Rate Term then Refi will force me into pretty much a dbl close correct?

Please help me understand this better or if there are any alternatives. I may just HELOC my way out of this, with the addition of the Rate Term and then I can complete the final 2 RR'S of this BRRRR :-) thanks everyone and looking forward to your responses!

My issue here is now

Thanks all for the replies.  So I decided to work with a Real Estate Attorney and confirm my property lines.  We haven't had any issues lately, however if in fact the survey is correct, I will be repairing/pouring a new cement driveway to help with the pitch and run off of water.  Thus elevating the height of our side of the drive 3-4 inches creating a berm separating the drives.  If she wants to maneuver her way out of the drive, she will damage her rims, underbody, etc.  I will kill two birds with one stone hopefully mitigating a future confrontation, and potential standing water in the basement/driveway.

Cheers for now!

@John Underwood

Thanks John. This was another thought but I want to make sure there aren't any hidden easements for ingress and egress prior to presenting this and or a wall.

@Justin Tahilramani

Thanks for your input. I will eventually be going this route. I just wanted to see if this is common and what others have done in this situation. Thanks again!

So this is a pretty odd situation however it may have happened to someone else in the past.  I JUST filled a tenant in my Duplex and the very first night they stayed there, there was already an upset with the neighbor.  Bearer in mind we have a shared drive, this neighbor came knocking on my tenants door for them to move their cars so that she (the neighbor) could get out of the driveway since her daughter was parked behind her.  Once I heard this story I was like has this lady gone mad?  The drive is 16 feet wide, and fits two rows of cars.  Left is for our property, and right is for hers.  Turns our her daughter was in the shower too long and she had to get to a doctors appointment so she came and made my tenants move their cars so she could get out on our side.  

It get's better.  Lastnight my tenants reached back out to me stating 'It happened again!"  It was 8PM and the neighbor came out and saw my tenants parking their cars at the end of the road on their side of the drive.  The Neighbor asked if they could pull up all the way so that she can get out in the morning as her daughter gets home at 4:30 AM and will park behind her.  My tenants said i'm sorry this is a shared drive, and you have your half and this is ours.  Have your Daughter put her car in the street or simply have her move hers in the morning.  The Lady called my my tenants some vulgar names and bickered for a bit before going inside.  My tenants are getting heated and if I do not get this resolved, I may loose them and others that may move in.

I pulled my property line and deed and it looks like I actually own more of that drive then she, and that in fact my property line goes right down the half of this "Shared Drive" also shown on the sketch.  

What can I do or what has others done to mitigate this?  I can't kill the lady and we certainly cannot remove her from her house.  Those were ideas of the tenants which I thought was rather funny at the time.  I CAN however put a sign on the side of our duplex stating that This half of the drive is private property and any unregistered vehicle will be towed at the discretion of the owner to scare her off.  I could have a talk with her as I already relayed the message with her Grandson.  Can I put up a wall, chained fence, and or a few poles with horizontal cabling to show as a barrier?

I have provided the attached image for any suggestions as to how to approach this.  Thanks all!

@Adnan Dizdarevic

Do NOT fall in love with a property. Fall in love with the process. Once you get your process and system down to find and slay deals, it will become easier to find them. Think creatively. Others are doing exactly what you are and you need to one up them. I like the idea of finding tax delinquencies from property tax. Others have pulled delinquencies on Water Bill's. I have found it easier to pull lists from a set range of equity owned and demographics. I then outsource this to be skip traced or hand it off to my realtor to do the calling for me. I made a list of 20 called 10 and had 6 people willing to sell. Now I have leads and potential wholesale deals to bring in more capital. Good luck and rememebr fall in love with the process!

@Whitney Hutten

Thanks for response Whitney!  Sorry if that post didn't read well.  I had a million thoughts going through my mind at that moment and it came out blurred.  

I will be Renting after refinancing absolutely. I didn't want to pull the trigger just yet on finding a new CPA as I've usually been handling everything on my own. I think now may be a good time since we are now incorporated as a Single Member LLC, and can use the passthrough as well as the Income Tax Benefits from the business.

I have kept seperate books on each property.  Come March, Everything should be on auto pilot.  Hopping to be able to refi on both properties rinse and repeat.

This whole journey has been amazing and failing has been a beautiful accident that everyone SHOULD endure.  I know I have, and that has made this journey even more exciting, making me crave for more.  Thanks again, and keep crushing it out there!