All Forum Posts by: Scott Russell

Hello! I have a question regarding mortgage interest and depreciation. I have 1 LLC managing 2 rental properties. The rental income for both properties is paid to the LLC and the same LLC pays both mortgages. The LLC is a partnership and creates 2 K1's. 1 mortgage is in my name and the other mortgage in my partners name. All expenses and maintenance flow through the LLC for both properties.

If the LLC receives the rent payments from both properties and pays the mortgage for both properties do we write off the mortgage interest through the LLC or on our personal taxes?

How would we write off the depreciation for both properties? Through the LLC or on personal taxes?

Any advice given would be greatly appreciated! Thank you! 

Update: 
While I was in the process of doing a cash out refi on the property to rent it I lowered the price by another 5%. Within 24hrs hours I had 4 offers??? The house went into a bidding war and went for 14k above asking price! Maybe I read the area wrong when listening it? Overall I had to drop the price by 50k to get it noticed... 

I'm still learning a lot with fix and flips and using your own cash reserves. Maybe ill take a look at "fix and flip" loans or other means of getting the funds to buy a property.

I already have a renter willing to pay rent. I was gonna pull enough cash out to where the rent will cover the mortgage amount?  (do a cash out refi for my cost and leave profit in the house) 

I haven't dropped the price again. Does it look bad to repeatedly drop the price on a house? I have dropped it 3 times in the past three months. If I do a big drop will a buyer think something is wrong? I have about 35k of wiggle room until I break even. 

Purchased the house with cash (3bd/2bth). The renovation cost was half personal money other half HELOC from other rental. The carry over cost with utilities and HELOC interest payments is about 1k a month. I still have a pretty good amount of reserved cash in the HELOC.

House located in transitional neighborhood. It's a growing area with lots of potential within 3-5 years. Its the first house in the neighborhood to be fixed up by far. We've had a lot of interest in purchasing but people can't get over the neighborhood. They see the potential but not willing to move into a neighborhood with the current status. I have dropped the price over the past few months by 8% and standing still now. I've owned the property for about 7 months. 

1) I can drop the price another 13% and break even. 

2) Drop the price 1-2% thought-out the next few months and hold until it sells? I can pay carry cost for a few months... 

3) I considered renting and Pulling 100% of my cash out and paying off the HELOC... the rental income would not cover the mortgage payment. I could leave some cash in it? DSCR Loan?

4) Risk short term rental... Some of the houses do great in the area and some do not. 

5) Any other advice? 

Thank you for responding @Kelly DeWinter. Would you know what would happen if the new landlord would want to scrap the building for a higher and better use. No way a large commercial asset could be held hostage by an antenna agreement?

I recently was approached by a company who wants to buyout my rooftop cell tower lease. After getting approached by 1 company I reached out to a couple others to see what the lease was valued at for other offers. I am always offered a lump sum, revenue share %, and an easement term (usually about 50 years).  The lease: Initial term of 5 years with 5 renewals of 5 years each term. 

Questions:

1) Why a 50 year easement when the lease is for 25 years? why do they want such a long term easement/lease? (some easements are for 99 years)

2) The easement should be for a portion of the roof and not the whole roof top?

3) If I sell the rooftop lease and they have an easement for 50 years would this hurt the value/resale of the property? (knowing the new owner wont get any money)

4) Are there any other terms I should consider when selling the rooftop?