All Forum Posts by: Ryan Fox

Thank you all for the responses, got it figured out.

@Karolina Powell- He has not provided me the depreciation schedules, but I will ask him for that.  That's something he would have to keep up to date each year to calculate the amount of depreciation to claim on Schedule E, correct?

@Diyan Yap- It's an individual tax return, but I don't have a schedule L as part of my filed return.  

@Karolina Powell- My CPA filed my returns in the years that I purchased my properties, and I provided him all the info as to purchase price, closing costs, improvements, ect. over the years.  I could work backwards if I had to to add up all of the depreciation I claimed over the years and subtract that from my original basis, but I don't know what the original basis was.  Correct me if I'm wrong, but my understanding is the CPA would have made some decision when I purchased each property as to what the depreciable basis of each property was.  For example, 75% would be depreciable value attributable to the structure and 25% would be non-depreciable attributable to the land.  Do you know where I might find that percentage in my returns?  Then I can work backwards and find what my current basis is.

Thank you both for your help.

I own about 16 rental properties.  From time to time, I consider selling a property and ask my CPA what he has as the cost basis so I can understand the tax ramifications.  Then there's a long wait...  Is there somewhere on my federal return where I could find this info?  TIA!

@Belinda Fello- Usually, when you rent a property that has an HOA, you have a term in your lease that requires the tenant to comply with any rules or regulations of the HOA. If your lease contains this term, it could be fairly easy to evict him if you need to.

Theoretically, if your lease does not contain such a term, you could ask the court to nullify the contract because it had an illegal purpose to begin with. It violated HOA rules for you to rent to a sex offender so the lease should not have been entered into in the first place.

Also, your tenant is lying to you.  Nevada law requires that only convicted sex offenders get registered.  (NRS 179D.)  This brings into question everything he's told you on his rental application.  

At this point, there's no need to do anything. It's a matter of whether the HOA finds out about his sex offender status. Also it's a matter of whether renting to him violates the specific wording of the HOA regulations.

Is it possible for Appfolio to generate invoices automatically?  For example, a plumbing issue comes up, and Appfolio automatically creates an invoice from the property manager to me for the plumbing services provided by a vendor.  My PM finds it difficult to gather all of the invoices provided by the vendors and upload them to Appfolio.  My CPA says it is sufficient for tax purposes to have records of invoices from the PM to me.  I don't necessarily need the invoices from the vendors.  

@Alex Peters- Following this thread for additional ideas, but here are my thoughts:

check bank account statements to make sure they have adequate reserves

check court records to assess litigation activity - both for the business entity and its principals

business credit report

Do they have experience with other properties in Joshua Tree?  Check title records to see if they actually own those properties or have a lease for arbitraging.

Use the California Secretary of State's business lookup feature to see if they are in good standing.  Do the same thing for any entity / entities that own the business entity.  Sometimes they're suspended for not paying taxes or other reasons.  

Agree to a lease that allows you to cancel the lease with minimal notice the moment anything goes wrong.

Ask for references and contact them

Side note: make sure you can actually get insurance to cover you under this scenario before agreeing to it.

@Dean Ng- Referrals are usually a good way.  Go to a local real estate meetup and ask other investors who they've used.  

@Shireen Y. - I'm assuming your not the owner of the property and you're bidding to buy it.  The Code of Civil Procedure does not define "right of redemption," so we don't know if CCP 729.090 applies to the 45-day right of redemption offered pursuant to CCP 29224m or the 90-day right of redemption offered by Civil Code 5715.  It would be safest to assume that the 90-day right of redemption applies and CCP 729.090 serves as a limit on your right to entry to the property.  

However, there's one case that says you're allowed to enter the property, change the locks, and renovate it if the property is vacant and uninhabitable to begin with. (Barry v. OC Residential Properties, LLC (2011) 194 Cal.App.4th 861, 868-869.)

Are there more cases that explain this better?  Possibly, but not that I can find without doing a lot more research.  

@Shireen Y.- Yeah so Civil Code section 5715 applies to a situation where the homeowner is trying to pay off the debt to the HOA and redeem his / her interest in the property.

SB1079 is codified at Civil Code section 2924m.  That code section, as you point out, allows a "prospective owner-occupant" to become owner if they submit a higher bid within 45 days after the sale.  There's nothing preventing the former owner from qualifying as the prospective owner-occupant as long as they meet the strict guidelines for being a prospective owner-occupant as set forth in Civil Code 2924m(a)(1).  That code section states:

(1) “Prospective owner-occupant” means a natural person who presents to the trustee an affidavit or declaration, pursuant to Section 2015.5 of the Code of Civil Procedure, that:
(A) They will occupy the property as their primary residence within 60 days of the trustee's deed being recorded.
(B) They will maintain their occupancy for at least one year.
(C) They are not any of the following:
(i) The mortgagor or trustor.
(ii) The child, spouse, or parent of the mortgagor or trustor.
(iii) The grantor of a living trust that was named in the title to the property when the notice of default was recorded.
(iv) An employee, officer, or member of the mortgagor or trustor.
(v) A person with an ownership interest in the mortgagor, unless the mortgagor is a publicly traded company.
(D) They are not acting as the agent of any other person or entity in purchasing the real property.