All Forum Posts by: Walchli Donna

Anyone have experience with this alternative creative financing vehicle?  The idea is intriguing, but online research has yielded conflicting opinions and "pay to play membership plans; can't get a straight answer whether this is legit or scam and not worth the front-end subscription payments.  TIA

Thank you Ashish for your thorough reply and including the IRS Form info. That was very helpful. 
I did eventually form an LLC with my investor colleague referenced in my bridge loan query. Though he is "professional" Real Estate Investor and Realtor, I am neither of those categories. Thus, as I am at this point a ‘hobbyist' and not a professional I presumed I would simply report whatever minimal profit or loss realized on this first joint flip project as pass through income. I imagined I needed to generate some sort of statement for him to write-off the interest on the bridge loan and figured I probably needed a statement form to reflect the proceeds from the joint venture flip. I was having difficulty researching the mechanics for how to actually report to the IRS and on what forms. Again, thank you BP Community!

Thank you all for your responses.  Clearly, I will find a CPA but I'm trying to get ahead of the game and prepare all the things I'll need for tax filing next year.  From the answers above, I gleaned that: 

 - I am not in the Lending Trade or Business Lender.  Thus the $3000K interest I earned from my hard money personal loan to my investor friend is considered "Portfolio Income" and will be reported and taxed at my personal tax rate.  Which IRS Form do I need to generate and give to my investor friend so he can deduct the $3000 on his taxes and what IRS Form do I need to generate to report my $3000K income on my taxes?  

Q1: How do I report the interest passive repayment interest income from a hard money-bridge loan I made to a flipper?

Q2: How do I report the profit and expenses from the sale of a flip?

Hello All. Three part question regarding my HELOC. TIA for any guidance and considerations.

1) I'm having difficulty finding a HELOC amortization calculator. Anyone have a resource for one that I can use?

2) I have two LTR properties: CO sfh and FL twnhs. The CO 1st position mortgage was fully paid off and in 11/2021 I opened a $200K HELOC, Borrow Terms are 5yr draw/15yr payoff at 3.99%. I borrowed the full $200K on this HELOC to purchase my FL investment property Nov 2022. I live in FL and self-manage this property but have a Property Manager for my CO property. I've been paying aggressively to free up funds to borrow at the 3.99% as needed. The current balance is approx. $160K and I have roughly 15 months remaining on the 5yr borrow period. With the economy and market as they are, should I continue aggressively paying down the HELOC to potentially borrow against again or should I just pay the Interest Only (IO) payments and seek other funding at the current day higher interest rates?

3)  So the FL townhouse is secured by the CO property.  I'd like to sell my CO property and do a 1031 Exchange for a local FL property but I've been cautioned by members in the local investment clubs about potential Relinquished Debt consequences.  I can't seem to find more info on this.  

Florida is a Super Lien State. On occasion when searching the County Foreclosure site I come across an HOA Foreclosure. If I bid and win on one of these auctions and there is no other foreclosure pending, do I get Title to the property and then negotiate with the lender to assume the existing mortgage?

Thank you for the help with my user link. 

So I purchased a County Foreclosure and used the BP Calculator but I bought it using a HELOC Loan. How to I input the HELOC loan info to get a more accurate report, I.e. the monthly loan payment?

Investment Info:

Townhouse buy & hold investment in Irvine.

Purchase price: $197,000
Cash invested: $25,000

What made you interested in investing in this type of deal?

County foreclosure.

How did you find this deal and how did you negotiate it?

County foreclosure website.

How did you finance this deal?

HELOC

How did you add value to the deal?

New roof, HVAC, interior paint, bath and kitchen renovation, landscaping.

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $237,000
Cash invested: $47,500

Split level 4/3, ASD-20, no HOA.

What made you interested in investing in this type of deal?

House hacking, downsizing from larger home.

How did you find this deal and how did you negotiate it?

Realtor friend.

How did you finance this deal?

Conventional mortgage.

How did you add value to the deal?

New roof, new flooring, renovated all three bathrooms, new paint interior and exterior, new SS appliance suite, new lighting, new front storm door, xeroscaping front yard, new water heater, new concrete backyard patio and wood deck, new garage door opener, and programable thermostat.

What was the outcome?

Became a rental property three years after purchase.

Lessons learned? Challenges?

Should not have invested in higher end LG appliances.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

Yes, power realtor Tammy Whalen.