All Forum Posts by: Josh C.

@Josh Klein

I’ve done new construction in Indy. I think you can buy lots for the prices you mentioned, but you might need a time machine to build a 3 bed house for 75-100k. Im a GC and no way I could do that. We routinely spend more than that on a rehab of a 3 bed house.

Most people are very reasonable. Just email saying you are unhappy and want to cancel. They are probably happy to not have to deal with you either and will waive the fee. Sometimes things are a bad fit.

As far as the $500 eviction fee that is cost to file. Regardless if you had the tenant move out early, the courts and attorneys will be paid for services rendered.

Also, the only people putting in furnaces for $1600 these days are unlicensed and usually unreliable people. A dude and a truck with some cheap tools. No real licensed company is going to do that. No good long standing company could afford to sell at that price. My opinion from having installed 100s of hvac systems dealing with real companies and crackheads alike. You can probably find the latter to do it, but you can’t find one to do several of them and show up when you really need them.

Seems like you want to park your money and collect rent. Nothing wrong with that. Would recommend A-B stuff. Low end rentals are very hands on and no for the faint of heart.

Just find a newer built place with the rents you are comfortable with and buy it. A class investing is very easy with way less risk. Your returns will be lower, but with no mortgage you’ll be happy will the mailbox money and should easily beat the bank. In Indianapolis that would buy you 8-9k a month in gross rents in A/B class stock. Not sure what that buys in CA.

Good luck.

You can absolutely bonus depreciate a large percentage of the building value of the home as described by the OP. Not sure why people are saying you can’t do this. So much misinformation on this thread.

We’ve done this for years and many many people do this as well. Being a RE professional (which I am) helps, but many of our clients aren’t and if you have a killer building making good money this is a great tax strategy regardless of RE pro status. You can’t count against your W2 income usually, but you can against the building income.

Now if you have a normal W2 income and a regular sfh that makes $150/month it's probably not worth the cost seg investment. But a very profitable and expensive apartment or STR it can make a lot of sense.

This is pretty much the lifeblood of the syndication business model. Very common and the OP got it mostly right.

@Bruce Woodruff

Ya’ll just have your poop pipes on the side of your houses down there? Baking in the sun on the side on house for the neighbors to look at? That’s nuts.

You should check with a CPA about sending 1099s. I’ve always been under the impression it’s anyone over $600. I find it hard to believe paying someone another way like a credit card or Venmo would negate the $600 rule. We 1099 everyone regardless of how we pay. And I bet if you double check with your CPA they’ll say you should too.

“Builders reel at a glut of unsold houses”

This is just a lie to get clicks. Builders in 99% of markets have and still are killing it. Days on market is still way lower than 5 years ago. Just because we don’t have 50 offers the first weekend doesn’t mean the sky is falling. Huge space between hottest market ever and 2008.

Literally the purpose of earnest money. If you were the seller you’d want to keep it. Have your agent draft the paperwork and the seller keeps the em as damages.

If caught lying and the seller ends of selling for less or has other real damages you are liable for those plus attorney fees. 1/10 would not recommend.

Lesson learned and move on.

100k in cash? That’s nuts. I’d probably take it, but I’d meet at a bank and have the bank verify it’s good. Or have her get it in bit coin and transfer it to you so you know it’s not funny money. We see this often in $600 rentals. Never in 4K rentals.

Be careful. But there are some people who keep everything in cash and gold. So it’s not impossible.

Maybe cali tenants are different than us mid-westerns. But with 14k gross rent potential and 11k fixed assets costs pre-vacancy and pre (minor maintenance as unit are new) is a money loser for sure. I’d ask to be bought out in a heart beat. Out here you can spend that much and get a 30 unit building with 25-30k a month in rent. I understand the weather is nice out there, but just can’t get over rental market and how it’s justified. Especially in what likely may be higher end of the market for cali.

Good luck.