All Forum Posts by: Simon S Marthinsen

A family member is a tax attorney and his answer was "its not clear".  I'm not worried about claiming any interest since it's such a short-term loan and is just a cost of doing business. 

What if he just brought the check (from the HELOC) to the closing and I paid the HELOC interest payments directly without any money hitting his bank account. Is there any tax implications for him if we do it this way?

There is also a title attorney involved who will be writing the promissory note.

I'm buying a commercial property with my business partner using his parent's HELOC as short-term financing. The purchase price is $230k. The heloc is 4.25%. We are paying interest only. What are the tax implications for his father in this transaction? How would you structure this deal so his income is not increased? He takes a standard deduction and is afraid of a 1099. We are almost immediately putting long-term financing in place and just using this as a bridge loean.

Ideally, his father just wants to sign the promissory note and forget about it.

@Noah McPherson

First I find the owner on the County tax assessors website. Then I find the phone number in TruePeopleSearch.com (free) or Whitepages.com ($14/month)

@Jacky Johnson

I’ve had this job done on a 4 plex before. I paid $100/linear ft.

One way to save is to hire the people to dig separately from the plumbers. Just have a licensed plumber plumb and diggers dig.

@Chris Hopper I also don’t have a w2. I’m an investor and I own a business.

@Chris Hopper

It’s through a broker so I’m not sure who the actual lender is yet. I just got the first approval. I thought the 2.5% was high as well and the 70% ltv is low. The broker said it was due to Covid. A few months ago I refi’d a 4plex received 2% closing at 4% interest with $156k cashout.

@Ian Middleton I’m in a similar situation. Self employed so no w2.

I'm refinancing a Non owner occupied triplex BRRR right now and I got offered 70% LTV on a $350k loan. I'll cash out $242k. I have $200k invested. My rate is 3.65% with 2.5% origination fee.

@Javen Bowman look into buying a property “subject to”, master lease, or with owner financing. Those options can get you a property for very little money.

@William Wright

I use Cozy.co for rent collection and to store rental agreements and Wave accounting to manage expenses. Wave is a great free alternative to Quickbooks

@James Barnes Hey. Every one of my properties besides one is built on brick piers. I prefer it because it makes it easy to do plumbing repairs and it’s easy to shore leveling issues. My apartment building which is on a slab had a drain issue. I had to hire a crew to dig under the entire building (expensive). Even if a pier is bad it’s easy to support the sills and rebuild the brick piers. I’m currently renovating a 3 plex that is built on piers. The plumber just crawled under the house and ran new water and drain lines. I wouldn’t worry about it.