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All Forum Posts by: Todd Rasmussen

Todd Rasmussen has started 29 posts and replied 1454 times.

Post: Which Matters More: Lower APR or Lower Monthly Payment?

Todd RasmussenPosted
  • Rental Property Investor
  • Clarksville, TN
  • Posts 1,480
  • Votes 1,420
Quote from @AJ Satcher:

*Title Edit: Which Matters More: Lower Interest Rate or Lower Monthly Payment?

Novice Investor here

Would it make more sense to go with:

- higher interest rate

- less money down

- no PMI (bc of higher interest rate)

vs.

- Lower interest rate

- More money down, 

- With PMI

Evaluating both options against one another is looking like the higher interest rate with less money down and no PMI causes monthly payment to be less. 

Let me know what you think!

It's very subjective based on what's best for you. You are probably paying the same amount down (towards loan principal); the more or less in closing funds is probably buying down the interest rate. The options to buy down rates typically break even before five years so that's the option we are currently excercising on a refinance but it really comes down to what are you trying to do and what option compliments your goals the best?

Post: Landlord insurance, does it work?

Todd RasmussenPosted
  • Rental Property Investor
  • Clarksville, TN
  • Posts 1,480
  • Votes 1,420
Quote from @Eric Fietz:

I see a lot of posts on here about the costs of repairing intentional damage from tenants when they move out. I have LL insurance that is supposed to cover such damage to a certain extent. Is this type of coverage useless or are the posters not using this type of insurance plan? I'm fairly new to this so would appreciate any feedback.


 If you think your rental dwelling policy is covering any of this damage you are incorrect; if you have some special tenant intentional damage type policy then I think you would be in the minority. Most investors I know choose to retain that risk.

Post: I have a very confusing depreciation situation. Can anyone help?

Todd RasmussenPosted
  • Rental Property Investor
  • Clarksville, TN
  • Posts 1,480
  • Votes 1,420
Quote from @Sean Wallace:

Rental property is a duplex.

2019 - Lived in one side, rented the other. Claimed depreciation. (Not sure what options I chose to depreciate with.)

2020 - Lived in one side, rented the other. Did not claim depreciation. (Didn't want to do it wrong because I didn't remember how I did it in 2019.)

2021 - Rented out both sides. Doing my taxes now and want to claim depreciation. (Still not sure how I did it the first year.)

I know I'm in desperate need of a CPA and should have used one to begin with but I'm learning as I go & Currently, I cant find a CPA that's taking new clients.

I have some very confusing questions regarding this situation and an answer to any of them is much appreciated! 

Questions. 

1. Does it matter what options I picked? e.g - 27.5 year property, 25, year property. Also MACRS 200%, 150% or straight line.

2. If it does matter what I used the first year. How do I find what I chose? (Does not show on transcripts from IRS & cant find it in transcripts from the software I used.)

3. Do I HAVE to do the amendment for 2020? If not what am I missing out on if I don't? 

4. Does me renting out both sides in 2021 and in future years change the way I have to do it even if I found out how I did it the first year?

5. If it does change the way I have to do it do I need to let someone know I'm changing it and why?


A) Take your 2019 Depreciation and multiply it by 27.5. Does that match your depreciable expenses in 2019 (Cost of home plus some eligible closing costs minus value of land)?

B) Did you make any capital investment in the property in 2020 or 2021?

If A=yes and B=no, then your 2019 and 2020 depreciation should be the same and your 2021 depreciation should be twice what you claimed in 2019.

If A=no, then you messed up 2019. If you used tax valuation anywhere to figure depreciation, you messed up 2019.

If A=yes, and B=yes then 2019, 2020, and 2021 will all be different amounts. 

I use excel to keep track of depreciation so I can answer the question, "wtf did I do last year?" Stessa is a free web based service that can also track depreciation for you as well.

Something like this:

Depreciation and Capital Expenditures 410 Pacific
Item Property Closing Flooring Appliances Remodeling Windows
In Service 2020- March 2020- March 2021- Mar 2021- Feb 2021- Oct 2021- May
Basis $ 37,419.00 $ 965.60 $ 5,712.00 $ 2,920.00 $ 7,720.00 $ 3,800.00
Recovery 27.5 yrs 5 Yrs 5 Yrs 5 Yrs 27.5 yrs 20 Yrs
Convention MM / SL MM / SL MM / SL MM / SL MM / SL MM / SL
Year Total Land ($9,355)
2017 $ -
2018 $ -
2019 $ -
2020 $ 1,246.27 $ 1,077.29 $ 168.98
2021 $ 3,241.54 $ 1,360.55 $ 193.12 $ 999.60 $ 511.00 $ 58.52 $ 118.75
2022 $ 3,750.77 $ 1,360.55 $ 193.12 $ 1,142.40 $ 584.00 $ 280.70 $ 190.00
2023 $ 3,750.77 $ 1,360.55 $ 193.12 $ 1,142.40 $ 584.00 $ 280.70 $ 190.00
2024 $ 3,750.77 $ 1,360.55 $ 193.12 $ 1,142.40 $ 584.00 $ 280.70 $ 190.00
2025 $ 3,581.79 $ 1,360.55 $ 24.14 $ 1,142.40 $ 584.00 $ 280.70 $ 190.00
2026 $ 2,047.05 $ 1,360.55 $ 142.80 $ 73.00 $ 280.70 $ 190.00
2027 $ 1,831.25 $ 1,360.55 $ 280.70 $ 190.00
2028 $ 1,831.25 $ 1,360.55 $ 280.70 $ 190.00
2029 $ 1,831.63 $ 1,360.93 $ 280.70 $ 190.00
2030 $ 1,831.25 $ 1,360.55 $ 280.70 $ 190.00
2031 $ 1,831.71 $ 1,360.93 $ 280.78 $ 190.00
2032 $ 1,831.25 $ 1,360.55 $ 280.70 $ 190.00
2033 $ 1,831.71 $ 1,360.93 $ 280.78 $ 190.00
2034 $ 1,831.25 $ 1,360.55 $ 280.70 $ 190.00
2035 $ 1,831.71 $ 1,360.93 $ 280.78 $ 190.00
2036 $ 1,831.25 $ 1,360.55 $ 280.70 $ 190.00
2037 $ 1,831.71 $ 1,360.93 $ 280.78 $ 190.00
2038 $ 1,831.25 $ 1,360.55 $ 280.70 $ 190.00
2039 $ 1,831.71 $ 1,360.93 $ 280.78 $ 190.00
2040 $ 1,831.25 $ 1,360.55 $ 280.70 $ 190.00
2041 $ 1,712.96 $ 1,360.93 $ 280.78 $ 71.25
2042 $ 1,641.25 $ 1,360.55 $ 280.70
2043 $ 1,641.71 $ 1,360.93 $ 280.78
2044 $ 1,641.25 $ 1,360.55 $ 280.70
2045 $ 1,641.71 $ 1,360.93 $ 280.78
2046 $ 1,641.25 $ 1,360.55 $ 280.70
2047 $ 1,244.69 $ 963.91 $ 280.78
2048 $ 280.70 $ 280.70
2049 $ 81.91 $ 81.91
2050 $ -

Post: Informed tenant of raising rent, they claim they can’t afford it.

Todd RasmussenPosted
  • Rental Property Investor
  • Clarksville, TN
  • Posts 1,480
  • Votes 1,420
Quote from @Mark Eaves:

@Matt M.

Being a free citizen of the United States of America I’ll say what I want where I want.


 Your permission or duty to speak comes on much greater authority that the USA. Peace brother.

Post: Informed tenant of raising rent, they claim they can’t afford it.

Todd RasmussenPosted
  • Rental Property Investor
  • Clarksville, TN
  • Posts 1,480
  • Votes 1,420
Quote from @Matt M.:

@Mark Eaves

Not trying to be rude, but we’re all here for real estate. Not churchy stuff, I’m sure you can find that in a different group. 

 You sure don't speak for me. For those that believe in and are saved by Christ it all becomes churchy stuff and there is no differentiation. The only rational thought you might have for your reply is that you believe Mark's post to be a waste of time. Your argument there would be understood, but if that were so your post which provides zero assistance to the OP is even more inappropriate. Maybe it is you that is in the wrong place? Not in not being welcome here, but headspace wise. The tolerance threshold you are giving off seems to be zero...

Post: How to deal with stubborn tenants?

Todd RasmussenPosted
  • Rental Property Investor
  • Clarksville, TN
  • Posts 1,480
  • Votes 1,420
Quote from @Jaron Jackson:

I bought a small multifamily property towards the end of December, which is located right outside the Atlanta area, with a tenant already living in one of the units. I am self managing the property as well. I think I have pretty good customer service skills and I say that because I always email or write my tenants a letter with respect and professionalism. Unfortunately, the tenants didnt like the change in ownership and feels as though they dont have to pay rent to a new owner since they didnt sign their current lease with me , the new owner. I would have loved to create a new lease for the tenants but they have stopped all communication with me after expressing that they dont want to pay me a dime. I proceeded to move forward with the eviction process after making it perfectly clear that I wanted to work something out with them(even offering to waive the late fee penalty). We finally had our court date at the end of February so I am down 2 months rent. Per the court order, the tenants must be moved out in the next few days but they havent even started to pack or anything. I fear that they will continue to be stubborn and not budge. To make matter worse, the local sheriff will not be available to come out to the property until a few weeks from now.  I don't want to continue dealing with the tenants for another month. Any advice on what I should do? Thanks


 Find out who at the law enforcement agency is in charge of scheduling their evictions and do your best to engage them. "I'm new and want to make sure that I have all the documents you need or need to make sure I've done everything I'm supposed to because I can't afford to get back in line" is a good segway into, "please don't make me wait in line with everyone else." If you catch a break, don't share it as causing someone you will have future interactions with to catch some flak for doing you a favor is not advisable. Good luck!

Post: Captain Gains Tax advice

Todd RasmussenPosted
  • Rental Property Investor
  • Clarksville, TN
  • Posts 1,480
  • Votes 1,420
Quote from @Rachel Czer:

Hello looking for a tax professional to help me with navigating capital gains tax on a primary residence. 


 williambingleycpa.com

Post: Informed tenant of raising rent, they claim they can’t afford it.

Todd RasmussenPosted
  • Rental Property Investor
  • Clarksville, TN
  • Posts 1,480
  • Votes 1,420
Quote from @John Gach:

So I bought my dads property, it came with a tenant who has lived there since the day he bought it 30 years ago. He never raised rent, it’s at $400/month. The unit isn’t very nice, she’s a smoker and there’s nicotine on the walls so I can’t even slap some paint on the walls to make improvements. Besides that it needs a lot of cosmetic repairs. Not a huge deal as atleast the property was bought at a good price.

Luckily the tenant is month to month, she supposedly is a nurse, which she should easily be able to afford more rent. I figured fully renovated apartments around mine would be around $1,000/month. So I sent a 90 day notice stating the rent will be $750/month. Would be hard to find an apartment for less than that around my area now a days.

She replied that she can’t afford that much, and that she lives here for a reason, and that she could do $500/month.

I haven’t replied yet because I’m trying to figure out the best response.

I know she has a boyfriend, so maybe I could tell her to have him move in if he fills out a rental application, and passes background checks.

Or maybe she could apply for Belmont or section 8, I’m not sure, although I imagine she makes plenty of money if she is indeed a nurse. Even if she is a nurse and is bad with her money, that’s her problem to figure out.

Any tips on handling this type of situation?

She has a lot of belongings in there, it’s not very neat, and I can’t renovate properly with her living there, so it kinda ruins my plans. I was planning to renovate, get market rate rents, and cash out refinance.

Thanks


 Advice would be not to raise her rent and just give her notice to vacate so you could renovate and get to market rates. Nurse is a very broad title and can cover minimum wage level work up to near 200K but I'd have to agree with you that rent at $750 sure seems manageable.

Rent increases aren't a negotiation you are offering a product for a set price. It is also not your responsibility or right to tell her how to solve her money issues.

Give her some time to be on her way with three decades worth of belongings, renovate and get your market rent out of it. You'll be resentful because you are going to feel taken advantage of and she's going to resent this especially and all future increases.

Post: Would you take your STR guests shooting?

Todd RasmussenPosted
  • Rental Property Investor
  • Clarksville, TN
  • Posts 1,480
  • Votes 1,420
Quote from @George Azita:

I own several guns including an AR-15. Barret 416, rifles, hand guns, have a lot of experience with weapon safety issues and the very last thing I would do is allow or participate in amateur shooting since amateurs do the dummest things when they have a weapon in their hand.

About two years ago at a place in Las Vegas where people pay to shoot weapons a woman fires something like a fully-automic AR-15, spun in a circle while firing and killed an employee.

A .22 bullet gun is no safer than any other gun just because it is small because a .22 will travel 1-1/4 miles because it is so small.

Regardless of how careful I am when shooting with friends, I've had many near-disasters like when I asked my friend three times whether or not he removed the bullets from the AR-15 chamber and then after transporting the gun from Las Vegas I opened the case and found the gun was fully-loaded and ready to fire with only the accidental pull of the trigger. That was the last day I ever allowed someone to go with me when shooting.

About 40 years ago, I fired a .22 rifle at an object about 300 feet away and the bullet went into a 4 x 4 post behind the object I was shooting at, made a U-turn and broke a window in a vehicle that was behind me. Judging by measuring the hole in the window the bullet cleared my chest at the level of my heart by only 12 inches. That was the last time I fired a .22 rifle.

My point is; I am a very conscientious and safety-minded person, but guns and bullets are dangerous and accidents happen. So, why would you put yourself and others at any risk just for a little fun. There is a true story that bothers me many times every year and the story is about a man who was walking down stairs with a rifle swung over his shoulder. His two children were coming down the stairs behind him, his rifle fired a bullet, went through the heart of both his children and killed them. 

As for taking your guests ATV riding, I can write horror stories all day long explaining why you don't want amateurs and idiots on ATV's. I've owned ATV's since about 1980 and still have 14 quad runners near Las Vegas. After several very unexplainable accidents that resulted in trips to hospital emergency rooms I finally learned my lesson and stopped inviting friends to ride with us in the desert.

We've had several unexplainable accidents where guests were riding quad runners at less than 20 mph and for no reason rolled the quads and broke their collar bones. About two years ago, my wife invited some friends from church to go riding with us. So, we gave the largest and slowest bike, a 4-wheel Honda 250 called Big Red made in about 1985, and the woman was riding very well for about two hours. So, just before we arrived at our home the woman was going about 15 to 20 mph on a super straight dirt road with zero bumps and I was behind her. For no reason the woman can explain she jumped off the quad when driving, broke a finger and we had to rush her to a hospital 45 miles away. NEVER AGAIN WILL A FRIEND OR GUEST RIDE ONE OF MY QUADS.

I've also had the very same type experiences with small water craft like the Sea Do or whatever you call them I had a Wave Runner and a Wave Raider. I let a brother-in-law ride one on the Colorado river where children were playing in the water. This fool driving the quad-runner was about 55-years old and I warned him about the children and dangers before he took off. When he came back to the shore he was coming in at about 50 mph and came so close to hitting the children he cause a father to want to beat him up and I had to get between them. NEVER AGAIN WILL I PUT MYSELF OR OTHER PEOPLE AT THAT SORT OF RISK JUST TO WATCH THE ENJOYMENT OF OTHERS!!!


 Your friends and your brother in law sound like absolute morons. Having a round end up behind you would shake anyone. That's a nerve racking experience.

Post: Would you take your STR guests shooting?

Todd RasmussenPosted
  • Rental Property Investor
  • Clarksville, TN
  • Posts 1,480
  • Votes 1,420
Quote from @Bruce Woodruff:

We have a guests coming next month from England. They have expressed an interest in shooting since they are really not allowed to over there. They say they have purchased travel insurance that specifically covers this activity (along with everything else they plan to do like horseback riding/ATV/Etc)

I know for sure my insurance will not cover it, but I'd sure like to introduce these folks to this.....my training is sufficient to provide a safe shooting environment. We could go to a range or to any of the nearby public lands that all allow shooting......

Thoughts?

I'd be comfortable with it, just be prepared to catch your firearm in midair. I've seen a few people flinch pretty hard after that first trigger pull.