All Forum Posts by: Victor N.

@Gilbert Dominguez The new IRC 199A deduction is not limited to the new Opportunity Zones. They are two different things.

First, why isn't your PM going over and checking maintenance requests before contacting you? That's what you pay them to do. If they checked it, how did they miss that the stove is working? Second, I always say yes when the tenant requests an improvement. Then I tell them I will get back with you on the additional rent it will cost to make the requested improvements. Generally, I research as necessary and quote a figure that amortizes the cost of the improvement plus a return on my money of about 10% over a year or 18 months. Most tenants decide they don't want the improvement that bad. Those that do pay for it and we are both happy. The property is improved and the tenant gets what they want at their expense. In your case, you said rent is under market so include some catch up increase. You already know the cost of the replacement stove and your time. Don't include a service fee in your lease because you will discourage maintenance calls leading to more damage to your property that could have been prevented with cheaper prompt maintenance and repair.

This is a long term tenant who is likely to accept a rent increase in order not to move. Did you get an estoppel agreement before closing? If so, why is the rental amount a surprise? If not, I would back up and give notice of the new rent amount with the method and timing required by your state. I would have already posted your state's version of the pay or quit on the 2nd day of the month. I would immediately inspect the inside of the unit to estimate the make ready costs if she leaves. Then I would set the rent close to market by calculating the difference between the new rent for a year and market rent for a year less make ready and 1 to 2 months of vacancy. Take the emotion out of it, she doesn't have to like you if she pays timely and takes care of the unit. Also, add a late fee policy and train your tenants. Mine puts the responsibility for receipt of the rent on the tenant. Good luck, this is actually a pretty good problem to have since it is a month to month.

Call the local health department and find out who is responsible for housing code inspections. What you are describing violates code most places. They can declare ot uninhabitable and require the sons to vacate. I would ask questions to find out how you can undo any action they take to get a certificate of occupancy later and not incur a bunch of fines.

Close the purchase through the title company that is doing the search. Share the cost with the seller.

If it is a foreclosure, almost certainly there is deferred maintenance which I don't see in the posted numbers. You will also need to account for projected capex, vacancy and property management including leaseup. We can't give you much og an opinion without that information.

@Tim Silvers sorry typo on your first name in my response

@Tom Silvers because when you sell inventory, you can't spread out the gain with the installment method so you have to report it in the year of sale. If the buyer defaults and you repossess, that is a new taxable event and you may have a gain or loss on repossession. You may not want to seller finance flip sales.

In other words, in your example, you would recognize ordinary income subject to self employment tax of $75,000 in the year of the sale plus interest income received each year on the installment payments.

I think you may have a more fundamental problem. Unless it changed in the TCJA, the installment method is not available for gains from the sale of inventory or property held for resale in the ordinary course. Real estate acquired with the intent to flip is not a capital asset but rather inventory. That is why the gain is also ordinary income and subject to self employment tax. I am sure some of my colleagues can correct me if this changed in the new tax law (TCJA)