All Forum Posts by: Na Na

Thank you for the feedback. Yes, the home has dropped in value since original purchase.

Since the home was not purchased to be a rental property, I was unsure if depreciation would still apply.

The tax software I use is pretty straight forward and can apply property depreciation for the current year. It just needs the numbers to make the calculation.

Thanks again.

Hoping from some help from this excellent BP community, since I am doing my own tax return. It is usually very simple for me.

I purchased my condo in 2006. Permanent residence until military transfer in 2010. I have rented the property since 2011, but have never deducted property deprecation on my tax return. Should I?

If so, how do I calculate the property depreciation for 2013? The purchase price in 2006 with in-service date of 2011? Purchase price in 2011 with in-service date of 2011?

I plan to sell the property when the market returns, hence the "unintentional landlord."

I do not have any other investments (properties).

Please PM if you wish to take this offline.

Thank you.

I'm a newbee, first time post, but I've read more threads/articles/books about this subject than you can shake a stick at. I'm almost ready to put my plans and knowledge in motion...

I have been researching medium-sized multifamily properties (20-50+ units). I have an interest in acquisitions and holding for cash-flow. I believe “cash is kingâ€. I have found some great properties in fantastic locations, with decades of low vacancy… even waiting lists for leasing!!! Some properties are university-associated student housing and some are not.

Even with inflated Gross Incomes and artificially reduced Operating Expenses derived from “La-La land†Pro Formas, these property still boast single digit CAP rates… as if they are proud to offer a property at 7%. I understand a lower offering CAP directly increases the property offering price. BUT by crunching the numbers, such a low CAP would never allow a 1.2-ish Debt Coverage Service Ratio required by most lenders. ESPECIALLY with an 80-90% LTV loan at current investment property interest rates and terms.

After leveraging a couple $M on a nice A- or B+ apartment complex, I would expect to have a sufficient monthly cash-flow… perhaps to live/retire on, but that doesn’t seem to be the case. The cash-on-cash returns are just not there.
Is there something I’m missing? Upon negotiations, does the seller realize how silly their asking price is and slash it by 30-40%? “Ha ha, potential buyer… you got me! I was just kidding about the ridiculously high asking price! Nice catch, I was just testing you.†Seriously? (AND do sellers actually believe I am going to consider vending machines and “claimed deposits†as property income???)

Or are lending institutions offering residential-style rates and terms for investment properties? (4.5% FRM for 30 years would be acceptable for me!) From what I’ve seen, investment loans are significantly higher with quicker pay-off terms.

The only way to make money on these low CAP investment properties are to hold and sell for increased value, or pay down the principle and pull out the equity at a later time. Sure it may be a strategy for some, but I’m not leaning towards that method.

It seems the only cash-flow values are found in smaller, blue-collar apartment complexes in “home-town USA†with proven track records of 10%+ CAP. True? Only then can an investor realize sufficient cash-on-cash returns.

Thank you for any feedback.