Real Estate Investing: Can someone explain to me rental income and taxes? |
- Can someone explain to me rental income and taxes?
- Best Flooring Options?
- Been Researching Real Estate investing, but is it right for us?
- Commercial property Tenant isn’t paying rent
- I'm in the market to buy my first family home, but I don't like working with realtors. I'm wondering if there are sites for buying bank owned homes or foreclosed homes or any other way to circumvent this process.
- Rentals in Low Growth low COL areas
- New Home Construction
- Bad timing to sell tenant occupied property?
- Property Purchase from Family?
- REO Transaction - Final Inspection
- looking to make my first rental property investment. Don't know what to do next.
- Triplex investing owner occupied
- Relative increases in land value vs structure value
- Sidebar, Florida
- Buying a three family with an additional office space. Can I get the office it's own electricity?
- Is it worth it to refinance?
- Bad inspection on sale of flip.
- I am a lost sheep with real estate. I'm looking at Opportunity Zone funds, any advice on which are worthwhile?
- Buyers, how did you find the inspector you worked with?
- Question About Property Analysis Calculator
- Is it feasible to be a profitable RE Investor in a country where mortgage rates are high?
- Month-to-month rental income applied to Debt to Income for loan approval?
- Tax lien issue
- Can someone critique the direct mail I’m about to send?? This property is for rent but I’m looking to see if the owner might want to sell instead. It’ll be my first property (duplex house hack)
| Can someone explain to me rental income and taxes? Posted: 06 May 2020 03:47 PM PDT I keep reading contradicting info when I Google search so can someone please explain this to me. Bonus points for links to legit info. I'm going to rent out my property (first time landlord), and will need to utilize a property manager. At the end of the year they'll provide a 1099 for taxes. When I search how renting your home can affect taxes I am not sure I am understanding it. For easy math let's say 12k a year. I get taxed on all 12k or only the portion that exceeds what the mortgage, interest, insurance, HOA, etc.? [link] [comments] |
| Posted: 06 May 2020 11:08 PM PDT I'm going to be renting out my current residence in the next year or so, and am in the process of preparing it to be a rental property. The property is a SFH, and has hardwood floors, which are fairly old, and in need of a refinish. I was wondering what everyone's opinion on doing a refinish vs. covering it with LVP/T. The floor is a bit uneven (but solid) since the house is from the early 1930s. Any help would be welcome, and be nice, this is my first post, and I'm learning as I go (and want to learn as much as I can before I dive into this). [link] [comments] |
| Been Researching Real Estate investing, but is it right for us? Posted: 06 May 2020 09:01 AM PDT Real Estate investing seems like an exciting field and for the past month, I have been doing research every day on it. I've been listening to "The ABC's of Real Estate Investing" by Ken McElroy. I've been watching countless, super helpful videos on Youtube by Graham Stephan and more. (The two have very different views, but still good to know) Anyways, our current situation is that we are both in our late 30s. Have a kid. We have a BELOW RATE mortgage on a home in CA. We won the lottery for a first time homebuyer program in our city two years ago. Instead of owing $1 million, we originally only owed $300,000 ish. Now we are around $175,000 for our mortgage. Some caveats for being in this program: We aren't supposed to rent it out to anyone else. If we sell it, it goes back to the city and we do get money back but not, obviously the market rate. The wife has a good job, I do not compared to her, but it's not too bad. I am working on it. Anyways, I was very excited to tell her about what I had been learning. But later that day, she threw some cold, albeit, very rational water on my excitement. She thinks that first of all, she might want to get a more permanent place to live first. But even if we went investment first, she said that because of our lower salaries, the things we owe each month like mortgage and so on, a bank would likely never approve us in this area. She said out of state would be even riskier even though it may be cheaper. I get that. She also said that even though I am learning, unless I am in real estate (broker/agent) or something, there are so many little things, but important things I could miss that only people like that would know that could cost us. She suggested that if we invest, we invest even smaller into storage units as our friend in real estate mentioned was another option to us once. I don't want this to go on too long, but I am happy to answer any questions you guys have. Just wondering what you think? Could use some possible strategies/ideas. Thank you in advance! Matthew [link] [comments] |
| Commercial property Tenant isn’t paying rent Posted: 06 May 2020 09:01 AM PDT Location: NYC Business: Chain Fast Food Restaurant Back in April we received a letter from our tenant simply explaining they will stop making payments as of April. In our contract it specifies that there is no exception that will be made for them not being able to pay rent. On top of that, there is no sign that they'll pay back the $$ from this. We have no idea if the store is even open (it's in one of the hardest hit regions of NYC and their phone doesn't work. corporate isn't very helpful either). Our attorney sent out a letter to them and they're practically ignoring us. We understand this is a difficult time, but if the business is open and our tenant is a multimillionaire with a huge network of stores I can't see how he can't pay the rent. This is a concern for our family as it's our own source of income. Am I really up the creek without a paddle on this one? EDIT: Wow didn't expect to get this many responses thank you for your advice guys. Had a new lawyer draft up a letter for us. I have more relief having heard from all of your replies. At this point we're just worried about when we'll see our next payment, but I am now confident we will see that money again, and if the tenants drop out we can always find a new one since it's in a pretty good location. Thanks again! [link] [comments] |
| Posted: 06 May 2020 05:12 PM PDT |
| Rentals in Low Growth low COL areas Posted: 07 May 2020 01:53 AM PDT I live in a small town of about 15,000 in a rural state. Single family homes can be had for 75,000 in very liveable condition. Older homes often go for 50 dollars a square foot. I can not relocate. I have half a million dollars cash to invest. I am considering investing some or all of this money in rental residential real estate. I intend to hold the investments unless the market for houses turns up. I think I can return 10+% on each purchase. I am running deals through calculators obtained by this and other subreddits and cap rates of 10 aren't uncommon. Cash on cash returns could be further raised by leverage. I am able to estimate costs fairly easily. Here's how I see the situation: Upsides: I'm an attorney and can vet tenants and evict them if necessary without a lot of cost other than my time. Tax advantages are obvious and I have very few write offs currently. The deals are easy for my to understand. I have access to better deals because I can pay cash, buy foreclosures at courthouse, buy estate sale homes, etc. Cash flow seems fine even if I allocate a lot to repairs and maintenance. Downsides: This area has no population growth and I think the chance of appreciation is low. The houses will appreciate at the rate of inflation if I am lucky. This is a big bet on the local economy which relies on oil and gas and governmental employment. If prices plummet I am exposed. Anyone have experience investing in a not-so-hot market? What am I not considering? [link] [comments] |
| Posted: 07 May 2020 01:52 AM PDT Not in a rush already have a house looking for a secondary residence want to build a custom home I have 3 options.
Which option would you choose and why? I am leaning to a 3rd option for cost savings but more headaches, chime in guys thanks! :) [link] [comments] |
| Bad timing to sell tenant occupied property? Posted: 06 May 2020 11:21 PM PDT I recently decided to pull the trigger on selling our filled investment property. We had been considering doing it since before the whole Covid situation, but didn't pull the trigger until about a week ago. We got an offer at asking price with all the standard contingencies from someone who hasn't even walked through the property, so we accepted it. Now, something I guess I should have foreseen. One of the tenants is very concerned about the buyer, agent, and inspector doing their walk through/inspection. Tenant has 2 young children and another on the way. I ensured the tenants that everyone would be wearing masks and gloves, and they were welcome to leave or stay during the process. But they are still pushing back. Any creative ideas on how to help make this happen, or was I just insane for deciding this was a good idea right now? [link] [comments] |
| Property Purchase from Family? Posted: 06 May 2020 10:40 PM PDT An opportunity has arisen to purchase a relative's home in another state as an investment property, but I'm not sure how to manage the purchase. My wife and I live in the San Francisco Bay Area. My wife's aunt lives in the Knoxville area of Tennessee, and will soon be moving and selling her home. We may purchase the property from her, most likely to rent out for additional income. Questions: What's the best way to manage this sale without a real estate agent? I don't believe we would need one since the buyer and seller are already known to each other, and we've spoken with her about buying the house. How do we determine the current, actual value of the home? We want to offer a fair price, but I certainly don't want to just use a Zillow estimate of the value! How do we know this will be a good move investment wise? We will likely have the home inspected for any significant problems before buying, but I also want to be sure we can get good tenants, that rent prices in the area are relatively high, etc. We visit Knoxville annually to see my wife's family, so we are relatively familiar with the area. It's a middle class, residential suburban neighborhood where most people own their homes, which makes it hard to figure out what we could charge for rent. [link] [comments] |
| REO Transaction - Final Inspection Posted: 06 May 2020 01:38 PM PDT I'm in the process of buying a bank owned foreclosure property to rent or flip. The seller had allowed us to make the transaction through a lender (with a mortgage) and offered to give us a $10k credit for any repairs we would need to get a CO (seller confirmed they would just cut us a $10k check after closing and wrote it in the contract). We checked with the mortgage broker beforehand about the $10k credit and she said it wasn't an issue, but during underwriting she said they're not allowed to include credits in the contract. So then after some back/fourth the seller reluctantly lowered the purchase price by $10k to make up for the credit. Now that we're close to closing, the lender is requiring that some minor repairs (smoke detectors, baseboard covers installed, water/gas turned on, etc.) be made in order to pass final inspection from the lender's appraiser. My question is, who is responsible to make those minor repairs in order to pass final inspection? I don't think I'm legally allowed to touch anything in the house until we officially close, but these things need to be addressed before the lender will allow us to close. Should we pressure the seller to address these items? Can the seller legally ask us to make the repairs or reimburse them for the cost? Thanks in advance. [link] [comments] |
| looking to make my first rental property investment. Don't know what to do next. Posted: 06 May 2020 09:24 PM PDT I have come across what I believe is a a great opportunity and I need advice on how to proceed. It is 4 duplexes, 2 bed, 1 bath units, 8 units total. Asking price is 240k. Units were built in 1990, 2 have been remodeled and 2 are currently in rough shape and in need of repairs, not currently being rented. So we have a total of 8 units. 4 renting out currently at 600 a piece, 4 empty but can be repaired somewhat easily. New paint, roof, and flooring is whats needed. So is currently getting a roughly 1% return on the property as it stands with a potential for 2% monthly return on purchase price. I am trying to figure out how to go about the financing of the property. I currently have about 27k in cash and savings, and an open HELOC with 52k limit. My current home which I have owned for 3 years has a note of 140k and was just appraised at 220k when I took out the home equity line last month. My main question is can I use the available credit of the HELOC in combination with my savings to use as the down payment on the loan? Should I use the same bank that I have the HELOC loan to do this with? Should I go to another bank to try to get the loan? Would I have to disclose to this other bank that I am using a HELOC to partially pay for the down payment? How much does a first time investor usually have to put down on a loan like this percentage wise? My last years earning were 63k and I have a $900 month mortgage and a $300 month student loan as my only two real bills every month. I am going to look at the property Friday. Thanks for all the advice and help, this subreddit has been a tremendous help to me. [link] [comments] |
| Triplex investing owner occupied Posted: 06 May 2020 02:21 PM PDT I posted a couple days ago looking to invest in my first real estate property. Real estate is extremely cheap in the small sub 50k population city I live in. I plan to live in one of the units to get a lowered down payment. I'm self employed and I'm aware this will require me to show more years of tax returns. I PLAN TO BUY A YEAR FROM NOW (June of 2021) Here are my questions
-I use my local credit union and I plan on getting a loan through them, or should I use a big bank? Is there anything I should specifically look out for or plan on doing in the meantime while waiting until I purchase the property? [link] [comments] |
| Relative increases in land value vs structure value Posted: 06 May 2020 08:16 PM PDT I am looking to purchase my first house. The area im honing in on was historically poor and gentrifying quickly, houses doubled in value over the past 4 years or so. The house I can afford (just barely) is 'okay'. The layout is a bit weird, multiple editions, a half bath in a bedroom, but it has new hvac, etc. The area around has a lot of houses that've been demolished to rebuild multifamily on the lots. At what point over the next 50 years (or any time period) does the homeowner get caught 'holding the bag' and the house is value is more worth the land than the house and land together? - even if it is well taken care of, it just doesn't make sense at some point as a city grows. Surely there is a 'lag' period, and I can foresee a 'zombie' house of rennovations, but really kinda a not that good house in a valuable area. Thoughts on this? I'm looking at bigger houses farther out from the city (in the burbs basically) that I can just tell are better structures and just imaging those ones will increase in value faster than the older smaller house with nice multifamilies all around. [link] [comments] |
| Posted: 06 May 2020 07:46 PM PDT Hello. I'm new to this sub and am considering purchasing my first income property sometime this year. On the sidebar, out of several of the men listed as investors we should know, only four mention where they are living. Three of them live in Florida. Is Florida a more favorable state for investing in income properties? [link] [comments] |
| Buying a three family with an additional office space. Can I get the office it's own electricity? Posted: 06 May 2020 01:32 PM PDT Hi Everyone, I am buying a three-family home, and this will be my first property. Under the third unit there is an office, and I was curious to know if there is a big cost associated with having separate electricity in its own name, so it doesn't tie into the other units. [link] [comments] |
| Posted: 06 May 2020 06:58 PM PDT I have a rental property where I still owe about $75k. The interest rate is 4%. If I stay with the current loan terms, it will be paid off May 2025. I currently pay around $1300 + tax/insurance/association. If I refinance at rates now, it looks like I could bring my payment down to between $350-$500 (plus tax/insurance/association extra). I've used a few online calculations and depending on if I go with 15 year or 30 year. Obviously the downside is it will extend the loan out into the very distance future…. It would really make a difference in my cash flow. We'd probably be getting about $1000-900 a month in income from the rental where today we just break even and some months lose money because of repairs. So my question to the group is it a) a good idea to refinance now or b) should I bite the bullet and keep paying the loan because the cash flow will come in the future. I've been going back and forth with my partner about this… [link] [comments] |
| Bad inspection on sale of flip. Posted: 06 May 2020 06:54 PM PDT I guess this is mostly a rant but, Anyone lost their sale to a bad inspection? So I list my flip at 295 2 days later I get an offer at 301. In a multiple offer scenario. These kids were first time buyers and my house was the first house they looked at or put an offer on. Everything was cool until they hired this inspection company that inspects but then quotes out how much the repairs will cost and gives you a discount if you let them repair it. there wasn't really much wrong with the inspection. A couple little things that were no big deal. Less than 1,000 to fix all the issues. The inspection company says it will cost them 10,000 to do all the work. Example They wanted $450 to put a cover plate on a junction box and it had to be done by a licensed electrician. They asked for 10,000 off the price we didn't feel like we were in a position to give them such a discount. My agent got in an argument with the buyers agent for allowing them to get ripped off so bad and the other people with offers put offers on other homes... so we're back on the market. I know stuff happens but, It's just annoying as shit. [link] [comments] |
| Posted: 06 May 2020 05:56 PM PDT I'm clueless about real estate but want to tax shelter my 800k stock capital gains. Is there a chance a fund could go bankrupt and I lose everything? Not sure about real estate during a recession [link] [comments] |
| Buyers, how did you find the inspector you worked with? Posted: 06 May 2020 05:18 PM PDT And were they good? Reposted and corrected, thanks /u/dotheoppositelunch [link] [comments] |
| Question About Property Analysis Calculator Posted: 06 May 2020 04:09 AM PDT Hi everyone, A few weeks ago, I posted the property analysis calculator that I made in Google Sheets. I made a few changes and fixed some of the calculations based on feedback from the community (so thank you for the advice!). I want to add a future value tab that takes appreciation, rent increase, expenses increase, etc., into account so that you can view 1, 5, 10, 20, 30 year projections. I'm reading up on how to do that, but figured I'd check here for pointers/tips as well since I've seen some people have FV charts and projections in their own spreadsheets. Any help there would be greatly appreciated. I also wanted to see if anyone would be up for testing out the spreadsheet and seeing if the calculations check out with you. Specifically, NOI, Cap Rate, and my Operating Expenses. I've spot checked it against Bigger Pockets, Deal Check and some other online calculators. If you would like to, I'll post the link below and you'll just need to hit "File -> Make a Copy" once in Sheets. Again, I sincerely appreciate the feedback! [link] [comments] |
| Is it feasible to be a profitable RE Investor in a country where mortgage rates are high? Posted: 06 May 2020 08:30 AM PDT Context: I want to invest in RE in Mexico. I hold citizenship so there are no hurdles in terms of owning property (historically it's been hard for non-Mexicans to invest directly). I have about 200K USD I can put to work immediately. Mortgage rates are hovering around 9-11%. Cap rates are marginally higher than in the US for similar property types. Are there any folks here who have successfully invested in foreign markets with a degree of success? It feels like success in RE is contingent on access to cheap and reliable financing, something that would be missing from the equation here. Any ideas on how to start small and leverage my investable capital? I have no prior experience investing in real estate. [link] [comments] |
| Month-to-month rental income applied to Debt to Income for loan approval? Posted: 06 May 2020 02:04 PM PDT I know that if you're buying a rental property with existing tenants who are already living there paying rent, you might have the ability to use a portion of that almost guaranteed rental income to offset your DTI for the loan. I also know, however, that most banks want to see tenants locked into year or longer contracts for them to be willing to consider that rental income for your DTI. Are there any exceptions to this, or is that a standard across the board? We're looking at a 3 unit property that has not had a month's vacancy in any unit for years, but all the tenants are on month to month leases, and none of the banks I normally work with are willing to take that income into account. [link] [comments] |
| Posted: 06 May 2020 01:52 PM PDT I found a potential property to buy and flip, but I have a question about the circumstances. House value is around $180k. It's owner occupied by a 68 y/o, who may be married. He acquired the property through warranty deed in 2010, which tells me this was a purchase, not an inheritance. In 2016, he quit paying property taxes, which means the property was either bought with cash in 2010 or paid off by 2016. The tax lien is $18k+. So the logical question is why isn't this guy using the equity to pay the taxes? It's his primary residence. What do you think is going on here? EDIT: I looked further....he has 6 commercial properties in his name and the name of his trust. (example John Johnson / Johnson Trust). [link] [comments] |
| Posted: 06 May 2020 01:38 PM PDT Hi xxxxx, My name is xxxxx. My fiancé and I are looking for our first home together and we are very interested in your property at xxxx street. Would you be interested in selling? Give me a call at xxx-xxx-xxxx. I would love to chat. Thanks, Drew P.S. We read about your ongoing cancer treatment on your rental listing and hope everything is going well! Okay how's that? I'm thinking the "P.S." part might be too much. But at the same time, it might make me feel personable to him. Thoughts? [link] [comments] |
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