All Forum Posts by: Joseph Davis

Given that you can depreciate a residential property over 27.5 years - if we buy a new home & turn our old primary residence into a rental - does the depreciation start from the date the home is turned into a rental or is it reduced based on the number of years we lived there prior to turning it into a rental?  FYI - we bought the home in July 2009.  

I'm curious to get everyone's opinion on forcing positive cash flow with large down payments or cash purchases. With high real estate prices & equity markets, it seems like a lot of people are just waiting for the other shoe to drop. I had a client tell me the other day they sold their bond positions & purchased a SFR based on a few things:

1.  Concern over a potential bond-bubble https://www.forbes.com/sites/danielkruger/2017/08/...

2. Whether there's a bond bubble or not - the SFR would maintain as a conservative part of their portfolio, generating positive cash flow & all the good stuff we love about real estate. They understood the 100% cash payment dilutes their cash on cash return & is not looking at doing an immediate cash-out refi.

3. If real estate market prices decrease - having high equity in the portfolio(which could also drop along housing prices) would allow them flexibility on a potential cash-out refi later on which could be used to purchase more real estate in a down market.  

Thoughts?

Looking for recommendations for property management companies in Mattoon, IL. Thanks!

@Jared Carpenter    MACU

Thanks for the feedback -  We are going to be really patient & am not going to make a move until the beginning of July at the earliest, so we'll see where we are at then.  @William Hochstedler I'd like to talk to you some more about the LTV question you posed. I still have a lot to learn for sure.

Also, thanks for the congrats.  We bought a single family home in Clearfield.  We put up approximately $20,000 and are cash flowing at $230/month. We struggled getting it rented through the winter but we have it up and running now.  Not perfect, but in the right direction. Needless to say, the wife is happy! lol.

We purchased our first rental last year & am now looking at purchasing a multi-unit, preferably a 4-plex. Our bank will let us purchase 1 more investment property with 10% down and no PMI, thus the reason for the 4-plex. I want as much leverage as I can, while I can.

 We are going to have a property manager priced into the deal at 10%.  This way, if I choose to manage it myself  I can go back to a property manager at a later point and still have positive cash flow.  The current manager we have is working out really well so we are pretty happy.  We are looking at the following criteria:

1. 20% equity upon purchase

2. 15% cash on cash return

3. At least $150/door positive cash flow after all operating expenses.

Beyond our normal due diligence, what other things should I be watching out for when buying a multi-unit versus a single family home?

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Are you happy with what you paid for your tax return last year?

We understand...we'll file your fed & state for one low rate! We run a virtual tax office & have 3 CPA firms ready to help you.

We'll also review anything filed for what they might have missed.  A second opinion never hurt anyone and often helps!  

www.taxsmartpros.com

801-784-TAX5

50% off whatever you paid your CPA Last Year

MACU offers investors a 10% down no PMI for up to $410k with a minimum credit score of 750. This is for residential only, not commercial. I was also told they'll finance up to 2 properties on these terms.

Joel Owens I totally understand what your saying. Just send me a pm and I can give you the details.