All Forum Posts by: Scott Moe

I'm looking for a reliable property management company in the NW suburbs of Chicago, preferably in the Elgin area. Specializing in old multi-unit buildings is a plus. Any referrals are greatly appreciated!

I recently purchased a single family with the intent of fixing it up and renting it. As I finished the rehab, I received an attractive offer from a friend who wanted to buy the property. I agreed to sell it and will be closing soon. My question is am I allowed to do a 1031 Exchange since my intent was to buy and hold the property? I never listed the property for sale. It was luck that I got a great offer. I have five rental units and have never flipped a house before.

Thanks guys! I will talk more with my accountant about it and see which option makes the most sense.

We are both on the title. 

I own a single family home that I am currently renting out. My father is on the mortgage and title. I plan to move into the property for at least two years and then sell. My father is letting me keep any and all gains on the property once we sell. I will avoid capital gains taxes if I live in the property for at least two years, but will my father have to pay taxes on the gain even though he isn't getting any money? Obviously, I'll consult a tax professional about this, but I wanted to get some input from the BP community.

I am closing on a fourplex in a couple of weeks. I am the only person on the loan, but my wife is going to be on the title with me. My wife is not currently listed on the insurance policy. Can she be sued since she is on the title? Is she automatically covered since we are married, or do I need to add her to the policy?

Hey friends! 

My name is Scott Moe. I've been listening to the BP podcast for a while now and finally decided to check out the forums. I can't believe how much I've already learned in the two days I've been a member! 

I am from the Arlington Heights area in the NW suburbs of Chicago. I have been investing in real estate since mid-2012. I have three deals under my belt and hope to continue doing at least one buy and hold deal each year. I am also licensed in Illinois.

I'm pumped to learn and connect more with all of you! 

Scott

@Brie Schmidt Thanks for the info! Can you explain a little more in-depth about "making sure the loan is shopped out as a Fannie conforming"? How would I go about doing that?

"Let's say I did the townhouse idea out here in the NW suburbs. I lived in it for year, then rented it out completely. I'd still have the mortgage in my name on the townhouse. Would that hinder my ability to get a new loan on a new property in Chicago?"

It would hinder your ability to get a new loan on a property near Chicago. The rental income  from your first property would need to be reported on two year's tax returns before it would be considered an income property (meaning a lender would no longer see it as debt or factor it into your debt to income ratio). Some lenders may be more lenient on the two tax return rule, but most follow this guideline.

It's great that you're looking to start investing in real estate! I actually got my start in real estate by buying a 3br/2ba townhouse in the NW suburbs (Streamwood). I lived in it for one year so I could take advantage of the low down payment and interest rate and then began renting it after 1 year of ownership. 

For the deal you are looking at, a lender would not factor in rent from other tenants when approving you for a loan. The only way another tenant would help the approval process is if they were co-signing on the loan. Typically, lenders do not recognize rental income on a property until it has been owned for two years and the rental income has been documented on the prior two year's tax returns.

Here are a couple of options you may want to consider:

You could purchase a duplex or triplex. You would live in one unit and rent out the others. I know you are from Elgin, and there are lots of cheap duplexes, triplexes in Elgin. I actually just purchased a fourplex in downtown Elgin (closing in two weeks). 

Another option is purchasing a townhouse where the payment is $1,000 or less per month (based on your budget). Live in the property for one year and then rent it out. You would want to make sure that the homeowner's association allows rentals. You would also want to do an in-depth financial analysis regarding current rents for those units, annual expenses, etc.

Hope this helps! Hit me up if you want more ideas of how to get started in this area or would like help analyzing some deals in Elgin.