All Forum Posts by: Rik Hunter

I've got a rental property that I'm considering turning into a STR. My only option is 28+ days. I've heard about traveling nurses and lawyers, for example. How should I go about seeing what the demand is in my area?

I'm rehabbing a 3/1 SFH that had it's garage converted into living space long ago (so it's on a slab). Where you'd park your cars became the living room, and an area at the rear became the "laundry room." It didn't make sense to have a laundry in your living room (with just slatted folding doors "blocking" sounds), so I planned to make it a 1/2 bath instead (with lots of sound proofing and a solid door).

The plumber is has two options. First, a macerating toilet that can use the drain pipe the washing machine used to use ($3,400 including the Liberty Ascent II toilet) or an ejector pump, which would be installed in the storage room on the other side of the wall; the pump option would of course require jack-hammering to create the pump pit ($1,200, I would supply the toilet). 

Any thoughts on either system, including such a large disparity in cost?  How about a $1,400 difference when accounting for the toilets? Jack-hammering labor seems more expensive to me, so why is the macerating toilet install more expensive?

I'm a rookie with duplex and SFH and using Brandon's 4-square video/form to run the numbers on this listing in my area (Chattanooga): https://www.realtor.com/reales...

Just a dream analysis, since I don't have the means to make it work for myself. And I'm likely making a mistake using a typical mortgage calculator and underestimating the insurance on 3 buildings. But with that said, with a 20% down payment and 4.25% interest rate, I'm getting -$119/month cash flow and a -.51% cash on cash return. 

No wonder it's been listed for 41 days?

@Erik Gundersen I’m just a RE rookie, but if your lease says something to the effect of entry with 24 hours notice, what stops you from showing up 24 hours later and entering after knocking?

@Jonathan W. It was a mix, for sure, and I categorized expenses and gave the CPA the spreadsheet. After Ashish's help above, all the numbers look good. But since we made over $100k last year, that x50% came into play and cut the allowable expenses, taking us under the standard deduction.

@Ashish Acharya That's super helpful. Schedule E shows the total expenses but then subtracts the rent collected (line 21). 

So Form 8582 shows $18,342 in losses after rent received, and its line 9 halves line 8 (18,342) to 9,562: the total losses allowed.

That's where I was confused. I wasn't expecting that x 50% calculation, and that total losses allowed then, is well below the standard deduction. 

Just got my tax return back from the CPA. It's my first time using one, and since I'm no tax expert, I was shocked to see that I owe taxes and that my wife and I only got the standard deduction because the "Allowable itemized deductions" only amounted to $10,906. 

How is this possible when I have $24,300 in rehab costs alone? How is the $10,906 calculated? 

(Sure, I'm getting higher rents now, and the ROI will pay off eventually, but I would have the same tax situation if I had done no rehab at all.)

@Matthew Irish-Jones, agreed. I let experts do any more complex plumbing and electrical, especially when doing it wrong could cause problems or it's too much of a time commitment. But simple things like changing out light fixtures or a faucet saves a lot of money over time. 

I only made out well with my first BRRRR because I did most of the work myself. It was a house-hacked duplex, so that helped a lot. Now I'm in a SFH BRRRR, but it's going to take less work to get it ready to rent, and I still do most of the work myself. I've been listening to the Real Estate Rookie podcast for a while now, and I get why Ashley looks for such low-valued properties; she doesn't do (much of) the work herself, and that's how the numbers work for her.

I refinanced before finishing a BRRRR in order to finish the BRRRR and buy a SFH.

We house-hacked a duplex and had completed all the exterior rehab but not much of the interior rehab on our side. The rented unit was mostly done except for the fact that after the tenants moved out, we added a new floor, counter top, and sink in the upstairs bathroom and had to replace the carpet after pet damage. 

By this point, we didn't know we were buying a SFH and had started the refi process to pay for rehabbing the unit we lived in (as well as pay off credit cards. We were "walking dogs for dollars" (my version of driving for dollars) and stopped to talk with neighbors who were planning to sell their house. We made a great off-market deal. Of course, after moving to to the SFH and finishing the rehab on the duplex unit, I wanted to refi again, but I couldn't refi the current VA loan because it wasn't out primary residence.

USAA says I need to use a commercial loan to refinance, but if there are any alternatives out there, I'd love to hear about them.