All Forum Posts by: Asher Anthes

Getting ready to buy my second property, and I want to do a much better job estimating what my monthly cash flow will be. So, first what is the best way to get an accurate measure of what the property will rent for? Zillow's rent zestimate? how accurate is this? Is there a good website that shows what nearby homes are renting for?

As far as costs, what is a good number to use for monthly repair costs? I've heard to use rent / 2 as your expense model. But this doesn't seem to be a very accurate way of calculating the profitability of rental properties, especially because you can get a pretty good idea of what PITI will be before you close a deal. What is a conservative routine repair estimate, and what is a good vacancy factor?

Finally, how much should I take into consideration the value appreciation vs cash flow potential. Obviously my long term goal is to build net worth as high as possible, but short term cash flow is essential to getting going.

Thanks for the help guys!

It's one unit

I bought my house last year, live in it and rent out some of the rooms to friends. I have a positive cash flow. When applying for my next loan, what will the bank ask for as far as proof of my rental income so that I can use this on my debt to income ratio? Tax returns, lease agreements? Will they want to check my bank account to see the deposits of my rental checks (some of my tennants pay cash)?

Also what will they use as my total "income" for the debt to income ratio? My salary + (rental income - PITI - expenses). I'm assuming depreciation doesn't effect debt to income ratio at all, and therefore is a benefit both ways, right?

Steaven: Am I only able to write off half of the expenses because I'm also living in the house? And I can only write off half of the interest?

Justin: I have tax software that walks you all through the process, so I am going to try to do it myself, although it may be a little complex. A CPA is probably a good idea. As far as utilities, everything is in my name and I pay it. But I split the bills at the end of the month between my renters. So I'm guessing I should claim this utility income and according to steaven I should write off half of the utility expenses.

Hey guys, just bought my first home in May of last year. Have got it rented out and living in it with positive cash flow. I'm looking to buy another house ASAP.

My question is how to minimize my taxable income this year while still creating a large enough debt to income ratio to allow another mortgage. I divide my rental income into rent ($1350 a month) and utilities split between me and my tennants (usually about $450 a month). Should I claim this utilities income and then can I write off utilites as a business expense?

Also, do I depreciate the house value based on the appraisal or the purchase price? And will the next bank (where I'm trying to get a loan for a second house) look at depreciation as deduction of my income? Because depreciation technically doesn't lower my cash flow at all.

Thanks guys, I'm a noobie asking probably dumb questions, but I have a lot to learn! And I want to make sure I do it right the first time!

Thanks for the help guys! I think I may look into the for sale by owner until I can get a tenant in there. If I can't sell for 20 - 30 k profit in a few months I'm content to rent and hold for a few years.

Okay, so I bought my first home a year ago. I live in it and rent it out to some friends as well, make about $400 a month cash flow. I have a decent job and business on the side for additional income.

I'm getting ready to purchase my first investment property. My original plan because of the market we're in was: purchase a foreclosure that needs some work, fix it up, get a tennant in at hopefully $500-$600 monthly postitive cash flow. Hold the property for 3-5 years along with my personal residence until the market has come around, and sell my properties.

I know you can potentially make a higher return on investment if you can flip the house, but my concern is that the house will stay vacant for far too long (because it's competing with all the under priced forclosures) and it will eat up a lot of my potential profit in holding costs.

What about buying a foreclosure, fixing, getting a tennant in, and then marketing the property to investors. This way, I guarantee myself cash flow if I can't sell right away, and at the same time I can maximize my return on investment by potentially selling the property for $20,000+ profit.

Advice? I'm looking to learn as much as I can before I buy.

Yeah, I'm definitely planning on reporting all the income. I'm filing it any day now. But will 1 years history be enough to use it on my debt to income ratio?

Chris, do you know how quickly banks will be able to use the 75% rental income on your debt to income ratio? I've had my first house for about a year (about $500 positive cash flow). Can they look at one years tax returns and extend my debt to income ratio so I can be approved for another loan? Or do most lenders want to see 2 years history?

Thanks!

Hi guys here's my current situation:

I've had my first house for almost a year, I have friends that rent from me (boarders income I believe it's called, because I live in the house myself?).

Not factoring utilities my gross rental income is $1350 per month, PITI is $866, a net of $484 monthly.

My salary is $3000 a month

I also have approx $500 of side business profit per month (probably won't apply to my debt to income ratio).

I also have about $280 a month of student loans.

So, my question is, how can I use my rental income to let the bank give me a loan for a second house? They say I maxed out on my debt to income ratio, but I'm really taking home a lot more money at the end of each month than when I got approved for my first mortgage.

I've heard something about the bank allowing you to borrow extra if you have history landlording properties. Do I have to wait for 2 years tax return history to get this benefit?

Thanks for your help!