All Forum Posts by: Todd Willhoite

Tax is not my area, so that is why I am asking here.  I may have misread this article https://www.bna.com/new-calculations-unrelated-b73014473901/

and

https://www.cupahr.org/5-changes-to-unrelated-business-income-tax-and-fringe-benefits-rules-under-the-new-tax-law/

I have heard that the UDFI tax rate dropped to the corporate rate of 21%.  Did the new tax law also change the UDFI tax rate to 21%?

I have a property I bought a year ago for $50,000, rehabed $15,000, now worth $100,000, current loan balance about $50,000. In theory I can refinance and pull $75,000 out doing BRRR strategy. Applied for conventional loan and closing costs are going to be $4,400. Clearing a little more than $150 a month after all expenses including cap ex, etc. It looks like due to the closing costs it will take away 29 months of profit (4,400/150). Does the brrr strategy just consider this a cost of business? Is there a way to get the closing costs down (I suppose I should shop other lenders) Maybe I should look at it as spending $4,400 to get $25,000 but I still have to pay back $25,000. Any thoughts on improving this and keeping refinance costs down for either this house or the next one I do?

Thank you.

I know someone who is being foreclosed on by the Rural Housing Service on behalf of USA.  Can you short sale a loan by USA Rural Housing Service if the owner is willing?

I am thinking of selling a property that I have held almost 5 years.  The buyer has offered an amount close to what I want.  Can I do a contract where he pays that amount to a qualified 1031 intermediary and for the remainder of the amount I want I do a seller finance note secured by a second mortgage on the property?  Will the fact I am getting part of the proceeds with a note mess up the 1031 exchange?

@Harjeet Bhatti Thank you for clearing this up. 

What is the difference between the underwriting called "manually underwritten" and "DU" for fannie mae loans?  In looking at the fannie mae website it says that manually underwritten loans are maxed out at six,  but DU (don't know what that means) underwriting can have ten.  Can someone please explain what these are or how to find out more information on them?  Does either way effect the interest rate of the loan? 

@Spencer R. Not being handy can be one of your biggest assets.  I had a relative that was not handy.  He instead called subcontractors to fix the issues, leaving his time available for higher level planning and searching for deals.  He did real well in real estate and had a comfortable income from his income producing properties.  

I knew another individual that got into real estate at the same time as my relative and he would go on the job with the subcontractors he hired and swing a hammer with them. He was busy physically building houses, and made a living, but never had time to amass the portfolio of passive income many of us are searching for.

You can hire inspectors to tell you if the house has good bones and what to look for.  When you get your first house under contract, make sure it has a contingency that you can walk away after inspections if you find something you don't like.  Hire an inspector and go through the inspection with the inspector asking questions.

Thanks for the information.