All Forum Posts by: Russ Draper

Well I ended up going with Quickbooks and I married an accountant :)

Seriously though, there isn't anything great out there right now, I am actually developing something now just for real estate professionals/landlords/flippers but it isn't ready yet.

Well there is usually a "new house premium" for new construction, so you do risk the property being worth slightly less after only 3 years.  My guess though is that the amount you are saving by owning vs renting would be more than that potential difference.  You can find out by looking at homes that have sold that are 3 years old and see how they compare to new homes.

I know some builders always try to make sure their new construction is "better" than anything used.  They put more windows, nicer finishes, and anything else to make their houses go first.  So each year they make their homes slightly nicer than the year before.

Honestly my experience with most agents is they don't know all that much about the property.  Their job is to sell it, they work for the seller.  You will want to have a very good inspector if you decide to move forward on the deal to find anything that could be wrong with it.  Any major expense that you can't cover would be a no-go, so perhaps foundation or major structural issues.

If it were me, I would have a separate LLC for the property and a separate bank account for the income/expenses. Also might be a good idea to file a quit-claim to "give" the property to the LLC business. This helps protect you (in theory) if you get sued as they cannot go after your personal assets since you did not "pierce the corporate veil".

https://www.nolo.com/legal-encyclopedia/personal-liability-piercing-corporate-veil-33006.html

Your closing attorney should be able to find that out and you definitely want to purchase title insurance at the closing!

Isn't the whole idea of 1099's to make sure the IRS doesn't say YOU are liable for the tax for these people?  Otherwise they will say that on top of what you paid them, you ALSO have to pay THEIR TAXES?

I thought that FHA first time loan was for lower income only, and could only be used once. And I thought it especially could not be used for investments:

"To prevent circumvention of the restrictions on making FHA-insured mortgages to investors, FHA generally will not insure more than one principal residence mortgage for any borrower. FHA will not insure a mortgage if it is determined that the transaction was designed to use FHA mortgage insurance as a vehicle for obtaining investment properties, even if the property to be insured will be the only one owned using FHA mortgage insurance."

You would have wanted to purchase it in the name of the LLC I would think, for liability more than tax purposes. I was under the impression that a LLC tax status is to "flow through" directly to the owner(s). Document everything and get a good CPA come tax time!

Depends on the area mostly, in ME you can buy a nice log cabin for $220k but around here you couldn't buy a 2500sq/ft home for under $700k.  Building costs are higher near cities (as are lot prices of course).

You should try to find builders in Denver to ask them, typically they charge per square foot as an estimate.

One thing that people often overlook is the amount of time they are spending on finding deals, trying to start that online advertising thing, etc (since sometimes it doesn't pay off).  You might be better off if instead of spending 10-20hrs/week on investing, in spending it working extra hours at work or a 2nd part-time job.  I know it isn't ideal, but to help yourself dig out of that hole faster it might be a good plan for you.  Then once you have some money saved then change to an investing strategy.  Good luck!