All Forum Posts by: Todd Rasmussen

 
YES! Only stainless steel braided connections!!!

Go to your preferred large home improvement retailer's pro desk and get an appliance package bid. Then take it to their competitor to beat. Then go back to your preferred large home improvement retailer and say, "Gee, I'd rather work with you. Can you at least match it?" Step 1 saved me 15.8% and step 2 saved 5.3% off advertised pricing. This also works on anything you spend a couple grand on there. I've heard of people starting at the second closest location for each and going through a second round of it by changing stores, but that just seems ridiculous.

Also, I feel like by not calling out their company by name, there is a lesser chance they revoke my pro services account.... Anyways, Team Orange.

I ask for lease status/expiration dates and have my realtor run comps so I know what the market looks like. I also write offers subject to personal inspection, so I have a chance to walk before I've even had to pay for a home inspection.

If you can afford the current debt service and you can bear to part with your worst performer, you could pay off your credit cards, HELOC, and have 40K to go to the next deal with. Mortgage the two you still have once your creditors report zero balances and you are looking at having 2.5 times your previous working capital as cash instead of loans for the next round of property acquisitions and more favorable rates than you're going to see under your current circumstance. The hurt at tax time might be worth working with cash instead of "cash".

I wouldn't worry about keeping a wood burning fireplace in a long term rental. Best case scenario, you are rewarded for your 10k cap ex with extra maintenance costs from getting a chimney swept and having a pile of wood next to your property which encourages termites and a bunch of other pests and rodents. I'd do a wall insert if you felt you needed it to be competitive and save yourself some worry and money.

Hi Sarah,

So I've done best case and worst case scenario's of what you are looking at. First off, I'd call a different contractor. If there is no second level on the home, a contractor should be able to walk and or crawl the attic to see how the ceiling joists are framed from above. There's no reason you can't get a bid for what you are asking for. What's lighting like in the kitchen? If it's the florescent light boxes those are usually framed as a sub structure and it should be relatively inexpensive. Just demo, new lighting and drywall. The more expensive situation would involve potentially having to reframe a portion of your roof/ceiling structure

Anything that is going to be a primary residence and cash flow positive puts you ahead of a lot of people. Might want to plan on higher cap ex if there are home systems that haven't been fully renovated, electrical and plumbing comes to mind especially with age of house (With the repair expense considered the total looks safe to me, but the oldest home I own is 1976).

Confirm you have reserves or other income that will sustain you if units are vacant. $1,700/month hit to income on the three bedroom unit will start to hurt very fast in this deal if you haven't planned for it to happen.

 100!!!

@Chase Cline

Speaking in huge generalities about passive investors that are non real estate professionals (ie have a normal source of income from a w2 or non real estate self employment) and without being a tax professional:

Yes. I wouldn't exactly word it like that, but you get to legally deduct so many expenses related to real estate investing that huge portions of your gross income should be offset by deductions. Limited experience, but have found Sch E line 26 (total rental real estate income) showed less than 20% of gross rents received on our least expensed (that's a word now) property in the past two years.

Speaking to your specific example, if you have 1k of "profit" a month and depreciation wipes it out, then you did not make any taxable income from your rental real estate activities and actually made "0" profit a month according for the IRS. The 12k in your bank account is just not taxed yet. When you go to sell the property, you will pay tax on the "profit" the IRS "didn't tax" through depreciation recapture. Uncle Sam finds a way to always get his.

@Chase Cline

Good luck! The only other thing I can think of is maybe it's being claimed as business income and flowing through schedule C which might explain additional taxes?