All Forum Posts by: Bob Norton

@Tamara Miller Sounds like you need to find another realtor.

@Account Closed Be careful that you are not tripping over dollaers to save dimes.  Every day that you delay converting the property to positive cash flow is costing you money.  You have holding costs, whether that is the interest on the loan for the property or the utilities for the property, you are spending money on the property.  I recommending taking the shortest path (least amount of time) to convert the property into positive cash flow.

So, when you are estimating the cost of doing the work yourself, you need to add in all your holding costs.

If it takes 3 weeks to get a contractor to do the work and you can get it done yourself in that time, then by all means do the work.  Keep in mind that while you are doing the work, you will not be able to do much of anything else.  

If you have a full time job, then hire a contractor.  I made this mistake on our first flip.  We made money, as long as I didn't add in the holding costs, but once I added the holding costs, I had lost money.  

Now I just point and write checks!

@Nicholas Schulin Take Action.  Go to all the real estate investor meetups within a half hour of your location to meet other real estate investors.  Buy your first property before you graduate.  House hack with some college buddies and then turn the house into a rental after you graduate.  Read David Greene's book "Buy, Rehab, Rent, Refi, and Repeat" and Brandon Turner's "The Book on Investing in Real Estate with No (or Low) Money Down" for ideas on how to make it happen.  All the books published by BiggerPockets are great.  Good Luck.

@Misty Wood Setting up an LLC for each build will give you some legal separation for each project as long as you treat each LLC separately. Which, as you mentioned, will require you to setup a separate checking account for each LLC and make sure you are paying for the project expenses out of the proper account.

You could combine all the activities into the same LLC, since you will be acting as a development company, and make sure that you have the proper level of insurance for the multiple projects.

As @Ashish Acharya mentions, you do not need a separate LLC for tax purposes.

@Chris Adler Mortgage interest on a rental property is a deduction against rental income for that property.  @Todd Mason I agree with @Joe Villeneuve in that your tenants are paying your rental mortgage for you and any excess cash flow can be used to pay down your personal home mortgage.  Your level of debt is a personal choice.  If you want to reduce overall debt, then I'd recommend paying down your residence before your rentals, as the cash flow from the rentals can take care of those mortgages.  You want to be a position where your personal cash outflow is lower in the future and paying off your personal mortgage will do that.  

@Daryl Byerly Your depreciable basis in the inherited property is the value on the day you inherited it, or six months after that date, whichever is higher (really your choice).  You will need some documentation as to the value that you work with.  Generally, this is an appraisal done shortly after you inherited the property.  An appraiser also can perform an appraisal today for its value in the past.  You begin depreciating the rental property when you place it in service as a rental.  

@Sam Pierson Generally, you capitalize your renovation expenses and begin depreciating them, along with the purchase price of the house (but not the land), when you place the property in service as a rental.  This can be when you begin advertising it as available for rent.  If you advertised your property as available for rent in 2020, then you would be able to start depreciating the property and you may also be able to deduct your operating costs as a landlord, for example insurance and property taxes paid in 2020.

@Collin Argue Yes, wait until you move to Florida and after you switch your residency to Florida.  Switching residency generally means moving to another state, getting a driver's license and registering to vote there.  Anything that a normal resident would do.  In the military, this also means making sure that they have approved your residency change.  Start working on that as soon as you can.

@Sean Delagrange For my LLCs holding properties, I name them so that you can't tell what the LLC does or what it owns. Too many investors use names which tell me "I own a lot of property and all these companies are related to each other - please sue me."

@Andrew D Hansen State income tax refunds may be taxable if you itemized on your Federal tax return and deducted the state taxes paid in that year.  If you used the standard deduction for your Federal tax return, then the state income tax refund should not be taxable.  If you received a refund of taxes that were not income taxes, then you would recognize those taxes as income only if you took a deduction for them in the prior year.