All Forum Posts by: Aaron Cappelli

I have run into an issue with my taxes. I bought my owner occupied 4 plex in OCT 2014. Therefore, the VA Funding fee (around 7000$) is all tax deductible for the tax year of 2014. The "tax professional" at H&R Block says that the funding fee counts as a business expense and should therefore go on my Schedule E for taxes. My Mortgage provider says that it's a personal expense and should go in Schedule A, he also said that he's never seen it put in schedule E before.

This is problematic because I am trying to buy a second house, and if my current property shows an extra 7000 dollars in losses (by putting the funding fee on the schedule E), the mortgage provider might not underwrite the loan.

Does anyone have any experience with taxes and VA loan funding fees on owner occupied properties?

Ya!, I think that could work.

I've been looking at FHA to finance my second property (a duplex). I've been crunching the numbers and the mortgage insurance premium can really cut into rental income. This is what I've come up with so far.

Mortgage: 320k +1.75% upfront (5380) 

Mortgage payments: Principal and interest 1448 + MIP 218 + escrow 150 = 1816 per month.

The income from an owner occupy duplex in my rental market is btw 1200 and 1400... so I'm losing 500 per month! Not including miscellaneous expenses/repairs.

Is getting an FHA for my second property worth it?

Currently with owner occupied fourplex, the mortgage is 2700, rents are 3400, but after bills, Im bringing in btw 2000 and 2500, so I'm losing a bit of money already. Even if I rent out my unit once I leave, I'll still be making maybe 500 per month off that property. So sure, ideally it would all even out, but with a slim margin for error.

Any thoughts/advice/comments?

in my first post, I meant to say that up front costs were minuscule***

I've been saving but I definitely need more. I read that in order to get a second property, you need to demonstrate that you have enough cash reserves to cover the mortgages of both properties for 3 months, essentially having 20k plus on hand. 

Hello!

I bought a four-plex in October with the VA loan, so up front costs were miserable. Everything has been going well so far so I am thinking about buying another property! However, from my preliminary research, the process looks more daunting and expensive. Any tips?