All Forum Posts by: Kayla Joachim

The guidelines are that the home office must be used exclusively for business and regularly used for business. In your case, you satisfy neither of these requirements and thus are unable to claim it as a home office.

If you qualify as a real estate professional, all of your rental losses (regardless of your adjusted gross income) can be used to offset your wife's W-2 income. So based off what you said above, you should be good to go here!

I would also be interested in hearing what anyone has to say. My roommate and I are considering a dual-LLC as well, though for a different purpose.

Hello from a fellow Minneapolis accountant and aspiring real estate investor!

Thank you for all the candid responses. It has definitely helped my thought process and put me back on track to listening to what the numbers are telling me.

@Sean S

The property is close to the intersection of Broadway and Central in NE Minneapolis, which is a very desirable area as I understand it.

------

I acknowledged that the property as presented doesn’t meet the 50% and 1%/2% rule, but what if things were changed? First off, let’s say we get the place for $475k, which is about the max we would pay. That definitely helps numbers.

Then, do you think it is unreasonable to expect $1/sq ft for rents? I talked with our real estate agent again today and we all agree that the units are underpriced. At 6260 total sq ft, there is a lot of potential upside there.

There is a 2000 sq ft 3 bed 2 bath currently rented at $1400, two 2 bed, 1 bath at 1280 sq ft upstairs at $900 each, and one basement 3 bed 1 bath at 1700 sq ft for $1200. Discount the basement unit at $.75 per sq ft, that puts you at $5,275. Say you can only rent the main unit at $1,600 (up $200 from today) you’re still making a square $4,875 which makes the deal look attractive.

Yes I’m playing with the numbers, but the property really is beautiful in that it is solid, low maintenance, great location, and has good appreciation potential with the neighborhood, including being next to a foreclosed house that based on the cracked foundation, we assume will be a teardown. 

Unfortunately no, the $4,400 is for all four units.

Hi Tim
Yes, we would be living in one of the units, which partly did influence our decision to look closer at this property because it is a nicer, newer property, built in the early 2000s. It's also part of the reason I estimated maintenance and repairs towards the lower side. What would you suggest is a better number/estimate for this category on this property?

Yes, but it is good to hear it from other people too.

Everything you said is true, it doesn't meet the 2%, 1% or 50% rules which I know and applied to other properties, but I think we were blinded by the fact that the property meets a lot of our other requirements + it has great appreciation potential based on its location (speculation I know). Therefore, we saw the property and liked it, so I ran deeper numbers on it without listening to the original red flags.