All Forum Posts by: Sharon H.

Hello everyone,

I just sold my rental property in San Fernando Valley. It was my primary residence before becoming a rental, so the gain is tax free due to the primary residence exclusion. Now, I have about 500K free cash in my bank account to invest.

I was thinking about using the net proceeds to invest in multifamily; however, after COVID-19, landlord does not have right to evict any unpaid tenants. And it seems like second wave is coming; restaurants, retail and the tourism industry are closing back down. The eviction moratorium could be extended to god knows how long but doesn’t sounds like the loan forbearance is going to be. It made me rethink about being a landlord and investing in multifamily.

On the other hand, there are mixed signal from the housing and stock market. While the housing market was slow in March to May, but it has gained steam since June in my neighborhood. The stock market has been recovered beyond the January level. The market seems to be very optimistic.

If you were me, what would you do to invest the money? My goal is to have $5000 investment income every month in the next 5 years.

I am planning to sell my house, the house is located in Los Angeles. The home value is in between $700K to $800K. It is a SFH, traditional 3 bed 2 bath house with open concept. The interior is nice enough but the exterior needs a lot of love and care. Here is a list of potential fixing and estimated fixing price is:

1. Roof (almost end of economic life) - New roof costs $8,500

2. Driveway (Major cracks on asphault that can't be fixed according to a driveway professional) - New paver driveway costs $4,500 or one inch asphault coating costs $1,750

3. Glutters (Still functional but they are from 1980s and the paint is peeling) - New glutters for whole house costs $1,500

4. Exterior Paint (White trim must be repainted, stucco is in okay condition with micro cracks) - New exterior paint with trim costs $3,100, trim only costs $2,100

I have a limited budget on fixing the house before putting it on market. I already planned to spend $3,000 on interior painting and $1,500 on other repairs and landscaping. Which above items do you think will worth my time and money to fix? And how much increase in value should I expect?

Thank you!

@mike

@Mike Cumbie @Theresa Harris @Account Closed

The tenants lived there for 2 and half years and the house was painted 2 weeks before they moved in

The rental property is located in Los Angeles. My tenant moved out last week. However, they repainted my living room, dining room, first bedroom, and damaged my master bedroom. They did not have my consent when they painted my house. I hope someone can tell me whether it should be deductible from the security deposit:

Please note all rooms were painted in beige before renting out.

Living Room – Tenants painted three walls in blue, one wall next to the fireplace in dark blue

Dining Room – Tenants painted all walls in light blue

First Bedroom – Tenants painted whole room, including closet in blue

Master Bedroom – Tenants two big holes on a wall for lighting, big holes on other wall for hanging TV

I have a handyman to come have an estimate:

Living Room - $750

First Bedroom - $350

Master Bedroom - $450

Total Damage – 1,550

I did not charge them for dining room since people say the color is nice…don’t want the tenant sue me for overcharging

Do you think the deduction is reasonable based on the location is in Los Angeles, CA?

Also, the kitchen cabinet doors were very chipped. It did not have any chip before renting out. Handyman say it is basic wear and tear, but agent say it is beyond wear and tear. What do you think?

Thank you for valuable opinions!

Sharon

Can someone recommend me an eviction attorney in Los Angeles, California? This is going to be my first eviction. I have been trying to work with my tenant for over a month, but she still has not paid rent. The overall due amount is getting huge and ironically, she is a real estate agent. She told me she cannot close any deals in past three months, no cash come to her at all. She knows the rules and breaks the rules. Sigh...

Thank you and Happy Holidays everyone!!

@Elizabeth Colegrove Hi Elizabeth, I always think new built would be more expensive than buying old house, the much higher purchase price will minimize cash flow even though with a slightly higher rent.

Also, can you share with me which area do you invest in? $2200 monthly rent is pretty impressive.

Assuming you are not a real estate professional, your rental activity is a passive activity. That means your passive loss can only be offset with other passive income. If you don't have any other passive income incurred in 2018, your passive loss from your Airbnb rental will be carried forward from 2018 to 2019 which can be deducted in 2019 if you have enough passive income in 2019 to offset any 2018 passive loss.

You have to issue 1099s to non-employee independent contractors that rendered services to your entity and were paid $600 or more during the year. If the recipient is a corporation, no 1099 is required. If the payment is made by credit card, no 1099 is required as well.  

I would suggest QuickBooks. I am an accountant and most of my clients in real estate industry are also using QuickBooks. It is easy to transfer and backup data.  Personally I don't like QuickBooks online because you can't open multiple screens at the same time and data loading process usually takes longer than traditional QuickBooks.

I love the old and new elements mixing together. Nice job!