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    Wednesday, March 17, 2021

    Real Estate Investing: Can I write off eviction moratorium as charity?

    Real Estate Investing: Can I write off eviction moratorium as charity?


    Can I write off eviction moratorium as charity?

    Posted: 16 Mar 2021 07:57 AM PDT

    As most of you know, we can't evict tenants due to non-payment of rent.

    I have a tenant that owes me ~6k. Can I write it off as charity so I can get some sort of benefit out of the government forcing me to let them live here for free?

    Edit: More details. I purchased the property with the nightmare tenants in February. Other tenants stopped paying for a while during covid, but worked with me to apply for assistance programs. Tenant stopped paying for water, electricity, and rent in September (which is when their lease expired). They have not paid a penny since then, have refused to file for covid assistance, and refuse access to the unit for pest control or for us to fix the broken water heaters on the unit. We filed for eviction in November. Got an appointment in December during which tenant told judge they couldn't pay and we're applying for assistance (which is a lie). We have filed for an appeal 3 times now. No date has been assigned yet. Tenant is on social security, which my lawyer says cannot be garnished after covid ends.

    submitted by /u/gdubrocks
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    How much money do you (really) need to make to invest in RE? (Southern Maine)

    Posted: 16 Mar 2021 12:57 PM PDT

    I want to start this out by saying I'm super ignorant of real estate investing in general and -- though I'm trying to learn -- I want to apologize in advance if this question is ignorant or answered elsewhere. I tried to look through stickied posts etc. before posting and didn't see anything. If I did miss something, I sincerely apologize.

    A little about me. I (27m) have a fairly steady job where I make 85k (call it 80k as I don't have benefits). I have some savings (~60k), no other debts, and am in the process of listing my home in the Portland, Maine area. If all goes well, I'm hoping to make somewhere between 40k and 60k off the sale. I'm hoping to take that, plus some savings, and invest in real estate. My grandparents did it before me and for whatever reason the prospect has always appealed to me on a deep level. I've been running numbers and looking at purchasing a 3 unit in the Saco or Biddeford area, which brings me to my question.

    How much money do you really need to make to comfortably invest in real estate? I feel like everyone I know who does this is a pilot or a lawyer or something like that. In my position, I might have some mild income increases, but am likely never going to be making hundreds of thousands of dollars. I know it deeply depends on the area you're investing in, so let me share a bit about the specifics.

    I'm looking at 3-units in the 400-450ish range. After running the numbers, it looks like I can expect somewhere around 3k of monthly expenses (including mild repairs), ontop of the unexpected large repairs, maintenance, etc. that would be inherent to owning property. Renting out two units in the area would, depending on the specific property, probably net between 2 and 2.5k a month, leaving the rest to me naturally. If I were to opt with a property management company, which I might well, this would probably be closer to 1.7-2k a month after annualizing those expenses.

    I take home 4.5k a month, which is closer to 3k after food, healthcare, insurance, etc. I currently spend around 1.5k on my living situation, and tend to put away around 700 to 1k a month into savings.

    I've talked to people in the industry who I trust, who generally seem to suggest that the numbers look solid. But I just can't shake the fact that being a landlord with my salary seems lopsided. Would anyone be willing to point out the holes in my thinking or share their stories? I'd be extremely grateful.

    I apologize again if this is a dumb question and thank you for reading.

    submitted by /u/Far-Protection-4086
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    Can someone help me wrap my head around IRR?

    Posted: 16 Mar 2021 06:45 PM PDT

    I've been a stock market investor for the longest and I'm trying to get into real estate but something I've been confused about is IRR.

    I don't understand how this is any difference from ROI.

    Can someone ELI5?

    submitted by /u/RippleDelete
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    Looking for a good multifamily broker/agent in Sacramento, CA

    Posted: 16 Mar 2021 09:32 PM PDT

    I'm a lifetime Sacramento native and am looking to buy my first home (sucks the market is going nuts, but it is what it is).

    My intention is to buy a duplex and live in half. I understand that finding anything that will cash flow in the area is insanely hard, but I want to get started in my home town.

    Looking for someone specifically with experience in the sac multifamily market and an investor mindset.

    Any leads would be much appreciated!

    submitted by /u/chickens_beans
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    What factors do you look at besides interest when deciding between home equity/cashout/heloc to fund an IP?

    Posted: 16 Mar 2021 05:23 PM PDT

    Question in title. But,

    Besides interest rates, what factors should i assess to determine if a home equity loan, heloc, or cash out refi makes the most sense to fund a downpayment for a property?

    The other biggest factor is LTV as far as i am aware, although i'm not sure which are typically better for this? I have found lenders who do no-appraisal 100% cash out refi which sounds dreamy, but likely has to be on primary residence?

    I have also heard banks are offering less helocs right now (due to market volatility presumably)?

    Do any of the loan types and terms change a lot when taking out the loan against another investment property, as opposed to primary residence? On average, a borrower is less likely to default if their actual home is on the line.

    Anything else i'm missing, or another way to think about this?

    submitted by /u/Sovarius
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    Inheriting tenants: how do I describe holdover in the Estoppel?

    Posted: 16 Mar 2021 05:49 PM PDT

    I am putting together an estoppel for some tenants (that I am inheriting) to sign, but all of the estoppel examples I find online1 describe 1. fixed term, or 2. month-to-month leases. My tenant's lease is fixed term, but it effectively transitioned into month-to-month holdover after the term expired last year.

    When describing the lease in the estoppel, is it best practice to reference the original fixed-term lease, noting it's start and end date (even though the end date is in the past)? Or, is it more appropriate to reference a "month-to-month" lease, noting the date that the holdover period began?

    submitted by /u/dev_bro
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    Should I get a local lender?

    Posted: 16 Mar 2021 11:27 PM PDT

    I have been using Better and SoFi for pre-approval but I have heard (could be wrong) that they might be perceived worse than local lenders by sellers. Should I go with a local lender? These ones I think offered better rates for me vs the big box Chase, Well Fargo in my area

    submitted by /u/Electric_pokemon
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    Covid deaths aren't increasing estate sales of homes

    Posted: 16 Mar 2021 11:08 AM PDT

    A year ago I was expecting a bunch of estate sales to pop up on the market but that didn't happen. Why not?

    submitted by /u/xender19
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    The best investment you can make ...

    Posted: 17 Mar 2021 01:58 AM PDT

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    submitted by /u/Healthtipsite
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    Advice on buying first rental property out of state ?

    Posted: 16 Mar 2021 08:32 PM PDT

    I am currently living in Southern California. I really want to venture into the world of real estate and buy property that I will use as a rental. The area that I live in is wayyyy to expensive for me to afford and get a good return. So this has forced me to look out of state. Looking for any tips or advice on managing a rental across the country . And what to look for when choosing a rental property .

    submitted by /u/33stoopid
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    Using cash gift from parents to buy property from parents - What's the illegal part of this transaction?

    Posted: 16 Mar 2021 08:29 PM PDT

    First off, I am describing a purely hypothetical situation that has no real life significance or applicability. I am asking because I want to understand the rules surrounding such transactions better and because I find it interesting in general.

    Situation: Parents gift their child 30k in cash which the child uses for the down payment to buy the family home worth 300k. The child adds another 30k of its own funds for a 20% down payment. So the mortgage volume is 240k. The benefit would be a higher cost basis (300k) which might prove beneficial further down the line. I assume this "boosting" of the cost basis might be the part that would violate tax regulations but I didn't find anything (yet) so if anyone can point me into the right direction that'd be awesome.

    The alternative and - as far as I see - legal route would be for the parents to grant their child a gift in form of equity in the transaction. Effectively the price (cost basis) of the house becomes 270k but for the mortgage it would still count as 20% down instead of 10%. Is this correct?

    submitted by /u/livesmartthrwy
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    Is this an expensive cash out refinance?

    Posted: 16 Mar 2021 10:39 AM PDT

    Here are the numbers I got from my mortgage broker. This is for a SFH rental property. It seems so expensive but I want to get rid of the PMI and lower my interest rate. The points seem high though.

    • Home Value is ~200k. So loan is for 150k (75% APV)
    • Payoff is 68k
    • Interest at 4.125% over 30 years. (Current one is 4.5% with PMI)
    • Loan Origination fee $4982
    • Other fees (App Fee, Underwriting Fee, Appraisal, etc) is $2447
    • This brings closing costs to $7429 on a $150,000 Loan, netting me about 70k Cash.

    The pros are that my interest rate would go from 4.5% to 4.125% and I would drop the PMI. My monthly payment will not change at all and I'll walk away with cash I can use to invest.

    The cons are that these closing costs seem insane. Is this normal? Any insight or advice is appreciated. Thanks!

    submitted by /u/Samson1978
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    Which online loan service have you used and would you recommend using them again?

    Posted: 16 Mar 2021 02:14 PM PDT

    Anyone have experience using those online loan websites like LightStream or SoFi to finance flips / renovations?

    How'd it go? Any thoughts on the subject?

    submitted by /u/Strupnick
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    Someone offering a bid to buy!!

    Posted: 16 Mar 2021 07:45 PM PDT

    First time seller what should I expect as a seller. What are some precautions to be aware of .any advice will be appreciated

    submitted by /u/churchnbar
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    High Homeownership Cities Pros and Cons

    Posted: 16 Mar 2021 07:36 PM PDT

    Hi All,

    What do you all think about high homeownership rates in cities? Is this a disadvantage?

    Are these places to invest in? Would you still get tenants if you were to rent it?

    submitted by /u/Funkflexity45
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    Which of These Items Would You Do First In A Rehab?

    Posted: 16 Mar 2021 03:00 PM PDT

    Should I do demo, mold remediation, or handle the foundation issues first?

    I fear a structural engineer will cringe if i send him in there first with mold present. I also worry demo crews wont want to work with mold present. solving the mold problem first may mean there will be more to be solved after demo. What would you do?

    submitted by /u/lollapoloo
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    Sister has the cash, I can find the properties.

    Posted: 16 Mar 2021 08:43 AM PDT

    Hi all! I have a question for everyone on here who may have experience in my situation or have the knowledge to share what may be the best route to take.

    So, my sister has a good amount of cash yet she doesn't want to do anything about finding the properties and analyzing them. However, on my end I'm the exact opposite with not a lot of cash on hand yet I can find the properties and analyze them. I've talked to her before about partnering in real estate investing and she said she's down to do it together and I approached her with the proposition that she provides the cash and I provide the property and we split it 50/50. We would most likely do the BRRRR method.

    So my question is, what is the smartest way to get this process started when doing this via partnership, what would financing look like if she has the cash for down payment (I know it depends on many factors) and it being our first property together, and just any knowledge from your experiences that could be passed long on this thread.

    Thank you in advance!

    submitted by /u/AyyyItsLahm
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    Does the seller usually pay for the title check? Is it normal to have a brokerage charge on top of the commission percentage?

    Posted: 16 Mar 2021 05:33 PM PDT

    My real estate agent is telling me this. And the charge is $395 + 6%. Just want to confirm this is normal. This is the first house I'm selling.

    submitted by /u/Cats_n_Kickz
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    Does anyone rent polebarns for storage on land? Advice requested

    Posted: 16 Mar 2021 09:50 AM PDT

    A cousin of mine bought a house that came with a second plot of land with a polebarn on it, which he's been renting out as storage.

    He makes a fair bit on the rental and it's virtually no maintenance or hassle so long as the tenants pay on time.

    I was thinking of buying some land, maybe a 1 or 2 acre wooded lot, building a pole barn on it and renting it out. I would place the pole barn in a spot where, if i sold the lot for construction in the future, the barn could be on the driveway of the new home and add value to the sale.

    So I'd get some rental income, enough to cover the mortgage and taxes, and have (hopefully) very little management and time required, and one day i can sell and hopefully have a nice payday.

    Does anyone do rentals like this? Does it even make sense? Am i missing something that could either make it unprofitable?

    submitted by /u/imsquare177
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    Rental to purchase of home. Tips welcomed

    Posted: 16 Mar 2021 04:01 PM PDT

    I'm in negotiations with my landlord to purchase the house I've rented from him for the past two years. I'm in a very hot market area (ct) and want to understate the best way to move forward. I asked him to spit ball an offer to me he thinks on the house. Came back with current market comps that have sold and I agree he is contextual($700k-775k). Taking in to consideration we aren't using listing agents and whatnot he offered at 50k reduction. My thought is Since we are I've also provide him w $110k in rental income over the past two years I'd offer 680k. I also wanted to get a proper appraisal on the house. Any suggestions or tips on the best way to proceed. I'm going to have an inspection done in the next week or so. Anything else recommended??

    submitted by /u/Yukon_Cornelius1911
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    Thinking about posting deal specifics

    Posted: 16 Mar 2021 12:31 PM PDT

    TLDR: Why should/ shouldn't I post the numbers of a deal on social media?

    I've been investing in RE for about 5 years now. My business partner and I have gotten into flips the past 2-3 years to fund the long term investments. He's a contractor and I'm a Realtor and we typically take on rehabs that need A LOT of work. I've been considering posting more (FB, Insta) to show the 'behind the scenes' of the work we do- specifically, I think it could add value to be super transparent and show the actual numbers from the deal. I wanted to bounce this idea off this sub and get a few perspectives on why we perhaps should/ shouldn't. As a background, when I first started, I didn't post ANYTHING- I didn't want anyone knowing I was involved in real estate. I didn't want to send the wrong message or mislead people to think I'm wealthy or anything. However, recently I've changed that because I realized that if no one knows what I do, there's absolutely no chance they'll ever bring me a deal, investor, etc. The intent isn't to be flashy or show off (not my style; I drive a 13 year old truck). Rather I genuinely want to A: provide value and give insight, maybe even inspire someone to get started in REI; B: establish credibility and hopefully increase brand awareness- maybe someone sees what we're doing and knows a relative who needs to sell their home, or has a rich uncle looking to invest.

    Thanks in advance for any insight!

    submitted by /u/mferna9
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    Facebook groups

    Posted: 16 Mar 2021 12:25 PM PDT

    Are there any legit real estate investing Facebook groups out there? If so, what are they?

    submitted by /u/Accomplished_One899
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