All Forum Posts by: Taylor Brugna

Frank Wells Due to debt tracing rules, the interest is deductible on your schedule e for your new property. A traditional mortgage wouldn't have made a difference relating to the deductibility of your interest expense. Since the debt is being used for your new property, this is where the interest expense is "traced" to. Hope this helps!

Fareed Zahid As a fellow New Yorker, what does your current living situation look like? Do you own or rent and do you plan on staying here long term? As I'm sure you know, prices are crazy here and it's good to have your living situation sorted out before you start investing. If you're renting, maybe consider house hacking by buying a multi family and living in one of the units. Expensive, but it will generally work out better than renting. If you already have a place to live-personally went the route of investing out of state. 300k can go a long way in other markets, unfortunately not so far in NY.

George Sleweon A good accountant and lawyer would come out to much less, and you get the added benefit of building a relationship for your future accounting/legal needs.

Hey @Jason Eberhardt,

Income from flipping properties is considered ordinary income and is also subject to self employment tax. If you structured your flipping business as an s-corp it will help avoid some of the SE tax but if you are only flipping 2 properties, an S-corp probably wouldn't be worth the trouble.  If the numbers make sense by all means go for it, just factor in the tax consequences in your analysis. 

Daniel Smith These do not go on schedule c, allocate them across your properties accordingly.

@Camie Jelinek Most people use the cash basis. The cash basis method of accounting is what you describe in #1-rent income is recorded when the cash is received, and expenses are recorded when the cash is paid. If I receive rent for February in March, it's going to show up in March's profit and loss statement. The mowing bill would be recorded on the 5th of June. Hope this helps

@Robert Courtney From my experience, inherited tenants have caused 100% of any issues that I've had so far and I've realized that the sooner you can get your own, well screened tenants in the better. You may get lucky, but I would definitely have a plan to get them both out eventually. Maybe get tenant 1 out asap and give tenant 2 a few months until you are stable. 

Good luck!

@Dave Chapa Maybe I'm not familiar with all of the accounting capabilities of buildium as I mostly deal with it as a management software, but I'm doubting that it has the ability to keep track of everything. 

What happens when you need to keep track of multiple mortgages/amortization schedules, overhead and misc expenses not paid through buildium,equity, cash accounts, etc.? There's a reason why QB and Xero are needed.

Kyle Grimm agree with Brandon Hall I take my monthly buildium statements and enter them into quickbooks. Buildium is awesome for property management, but it will never tell the whole story from a financial perspective.

Lisa Landivar You can own the home for 3 years and still qualify. It's just owning for 2 of the last 5, not 5 years in total.