All Forum Posts by: Account Closed

Just putting it out there... on the back end of this deal, when you sell one day, you need to inform yourself about FIRPTA. In short, as a foreigner you are liable to pay 10% of the sale price in tax to the IRS. There are conditions to get an exemption from this tax and you would need to consult a CPA for information on whether you would be able to get an exemption.

In my case, when selling my condo (which was my primary residence) I was able to get an exemption. I submitted the forms to apply for the exemption as soon as I had a signed contract with a buyer and only got my exemption certificate some 6 months later. The 10% was held in escrow by the sellers lawyers after closing until I could provide the exemption certificate.

Just something to think about as you consider what your investment timeframe and goals are.

Still it might be a stretch to get actual compensation. Probably what your friend could do is ask for compensation or insist that the landlord stick within the bounds of what is allowed in CA. Your friend does not have to agree to showings that go beyond that.

Hard money lenders focus on lending for different purposes. Given the high interest rates, very often they only lend if its short term and you (the investor) have an "exit strategy" e.g. in the case of a flip having a plan to sell it within a certain amount of time. There may be a limited number of HML that would lend for a buy and hold strategy.

One other thing to think about: If one unit is finished and the other is unfinished. Bear in mind that if you need to finish one of the units, you'll also need cash for that.

Sorry I didn't give the grand, simple solution. I hope you figure it out as it sounds like a great opportunity that has come across your path. 

You could also advise her to look into FIRPTA. I'm not sure how long term her plans are but if she doesn't become a US citizen at some point, it is possible that FIRPTA will apply one day when she sells the place. A CPA can advise in which circumstances FIRPTA would apply and or you can search the internet for some helpful articles.

What does the lease say? A lot of leases include a clause that the landlord is allowed to do showings once the tenant has given notice, typically in the last 30 days of the lease. If the lease includes such a clause, then your friend will probably not have any luck getting money for "inconvenience".

Even if the lease doesn't have a clause for this. both parties would need to probably be reasonable and accommodating. I've never heard of someone getting compensated for inconvenience.

I'll say the obvious but probably a lawyer is going to give you the definitive answer.

Off the top of my head though, one way to reduce any liability you may have is to ensure the lease specifies the (correct) number of bedrooms and the maximum occupancy. E.g. in some areas that means 2 people per bedroom max. Say its a 2-bedroom place and there are four occupants in the unit the renters would be within the terms of the lease. Then there's not much you can do if someone wants to camp out in the basement or sleeps on the sofa in the tv room. If your lease had this limitation in it, then you would simply police the number of people living in the house.

If you were to purchase this house with tenants in place and there existing lease does not have this sort of clause in it, then I'm not sure what you could do if there were 6 people living in a 2-bedroom place (using the above example).

Usually walking up to someone to ask them to be your mentor is awkward if they don't know you. So your approach of networking is the right one - going to REI meetups and connecting with colleagues on BP. You're checking a lot of the right boxes with your plan.

Let us know if you have any questions by posting here on BP.

Hi @Danielle Golden-Banks

Its all right here. There's a lot to learn. Reading the forums will help a lot but these are essentially a collection of people's opinions and thoughts and may not always be correct. The "learn" tab at the top of the page has some e-books for you to start on. The podcasts are also helpful and cover a variety of topics. Pretty much - explore the website to your hearts content.

Find a local real estate investors club or meetup. There's a great one here in New York that meets about once a month or so and has speakers on various topics. Also a good place to network with other NYC investors.

Most people operate on the principle that its easier to ask for forgiveness than to ask for permission.

How do they know where the apartment is? You could try not putting the address in the ad. If you have a "for rent" sign in the window, that's another story. Another tip is to only put pictures of the inside of the unit, that way they can't find the building based on a photo of the exterior, say in a small town.

@Cal C.

I remember your thread. Good job on getting above water.

Are any of them cashflowing? Or are you paying out of pocket for all of them?

What is your contingency plan in the even of vacancies or major repairs?

I hope you don't mind all the questions.