All Forum Posts by: Calvin Thomas

Hi all - Dave Matthews here. I've got two properties now, townhome and single family, both rented. This will be my first year where I will be reporting ALL the rental income (some 60k or so). My question to you all is how in the world do folks deduct deduct deduct so that their tax burden on rental income is zero or close to it? I am worried that I will owe big in 2026... 

 Just remember its not that they are not paying taxes - its they are deferring them.

As an example (not a CPA), lets say you have $10,000 in income and you depreciate your property by $10,000 - your net gain is zero BUT your cost basis (lets say you paid $250,000 for the property) is now $240,000. So if you sell it for $300,000 - the property now has a $60k gain (not $50k). Hope that makes some sense.

You can 1031 to defer it but a 1031 is typically done by institutional investors and its rare for individuals to do it.

You've got options here, especially if you're trying to avoid giving up equity. If you've got strong credit and income, a personal loan or HELOC (if you own other real estate) might be the simplest solution. Also drawing from a retirement account like a 401k, or using credit card balance transfers strategically just to bridge the gap, though that takes discipline.

If you’ve got a friend or family member who believes in what you’re doing, a short-term private loan with interest could work too, without diluting ownership. Just make sure it’s all documented to keep it clean.

Some of the comments in this post are interesting. I wouldn’t lose heart just because folks on here tell you you need to save more or get a better job. What you might need is just a bit of creativity. 

Hello BP,

I am in search for a rental property and have 2 bank pre-approval letters for the funding. However, I'm afraid I'll fall short in cash to close and for the 15-20% down payment the bank requires.

What are some strategies you use to raise cash for down payments without having to dilute my ownership? 
thanks 

Conventional loans allow properties to be transferred to an LLC after the loan has funded if certain requirements are met. The borrower must remain on the note and mortgage, but the Title can be transferred to an LLC, LP, or certain trusts so long as the majority owner/controller of the entity is the borrower. Conventional does not allow entities to be the borrower, so you cannot fund a new loan while the entity holds Title. That being said, I remember this only applying to loans made after 2016 or something like that.

Govt loans (FHA, VA, USDA, loans that are modded/distressed where the govt has an interest) cannot.

 FICO is 767 not sure what my dti is. 

 If it’s a Fannie, Freddie or FHLB loan it is allowed by those agencies

Hey all, I have not closed a conventional mortgage for investment purposes before. I currently have a deal under contract and am working with a lender. I used this lender before for my personal residence and was pleased with them but currently they are wanting to charge me 7K in fees on top of closing costs. I have a duplex under contract for 215K, 25% down (54k), closing is 7K, and lender points and fees are 7k for a total of $68,000. Interest rate is around 7.125%.

Do these fees seem unusually high or am I just out of touch with current lending costs? Any thoughts appreciated.

Thanks