All Forum Posts by: Keith Schulz

Hi all,
I'm fairly new to real estate investing. I've owned a duplex for a few years, and I have always just claimed the income and expenses associated with it on a schedule E. Last novemeber I started an LLC primarly for marketing to buy foreclosures, and holding property title. I have not yet moved the duplex title into the LLC name. So far, I have not had any income from the LLC, but I have had some expenses for, mailings, setup, etc.

My question is do I claim the expenses for the LLC seperately on a schedule C, or can I combine the expenses with my rental on the schedule E? Also, does it make a difference if I claim my home office, as business or rental expense?

Hey everyone,
I'm a begining investor, and currently I own a duplex and the house I live in. Anyway, I've got my eye on another duplex that I would like to do a condo conversion on. My question is, is there a better chance of talking the seller down if I don't have a buyers agent? Do selling agents take the full 6% if there's no buying agent? If so, I assume the seller could talk them down to 3%.

In any case, I have a realtor that I have worked with previously, who is also a friend of mine. I wouldn't mind telling her about the property and using her as a buying agent, just so she can get the commision and I can get her opinions on what each side would list for as condo's. ...but if I have a better chance of getting a better price without a buyers agent, I'd go without her.

I'm thinking each side would sell as a condo for $160,000 to $170,000. They are asking $269,000 for the whole duplex. I'd try to get it down to $245,000 or so.

Any thoughts??

Thanks,
Keith

I went to school for Architecture, but currently work for a mechanical, electrical, and piping consulting engineer (so I work with architects all the time). My experience is with very large buildings (mostly industrial). What I have seen is all over the map.

I have been on projects where the architectural firm is the general contractor also. I have been on projects where the client holds all the contracts and the architect and engineers just supply design and documents. As for fees... that totally depends on the contract too. Sometimes it's a set fee, sometimes they charge so much per hour, and sometimes they charge a percentage of the construction cost.

In anycase, I would think most smaller architects probably have a usual way of doing things, and most big firms (with many architects) probably have negotiable contracts. I would just call a few in your area and see how they normally do things. Or if you have a preference tell the architect what you are willing to do.

Oh, and a perspective of pricing... The archs I usually work with for my job bill out around $100/hr. My cousin hired arch (one man opperation in a small town in IL) for some remodel plans on his house for $18/hr.

I hope that helps a little.

I was thinking the same sort of thing. I was looking at a duplex here in Madison WI. I had a verbal deal with the seller to buy it for $260,000. One side rented for $1100, the other side for $900. According to the 100 x rule it's only worth $200,000. ...but yet I acted to slow and somebody bought it out from under me at $280,000. It appraised for $320,000. In my opinion if I got the place for $260,000 I woulda stole the place. Coulda done some minor fix up, condo converted it, and sold each half for $200,000 a year or two later.

Anyway, in my opinion, there are lots of good general rules of thumb out there. However, you can't live by them. You gotta look at the whole picture, and see how you'll come out in the end with what you plan to do. ...and like somebody else said... What's a bad deal for one person is a good deal for another.

Your not always required to use a down payment. Although if this is your first property and you don't have extremely strong credit you may be required to have a down payment.

I'm fairly new to investing, and am looking to purchase a third property. I was going to partner with another invester on a duplex, and we found creative financing that would finance 100%. The deal fell through though, because another buyer stepped in and offered $15,000 more before everything was settled.

In any case, usually with good credit you can obtain 100% financing.

According to www.bestplaces.net San Antonio has 6.8% of it's housing vacant. Check out that site. There's some good info for any city there.

I own a duplex in a small town in Wisconsin (30 miles west of Madison). I bought it and owner occupied it for 2 years, and then moved back into Madison. In any case, I've been debating doing a condo conversion and selling it in halves, or holding it for a few more years.

The positives of selling it now that I see are:

-I would have more cash available for making other investments.
-It's would be good timing to sell this summer since both of the tenents leases expire (one in July and one in August).
-I wouldn't have the hassle of managing a property 30 miles from home in an area that's hard to find good tenants.
-My low variable interest rate will expire in about a year so my interest rate will go up by at least 1.5% then.

The positives of holding that I see are:

-I have a positive cashflow of $380/month
-The property is appreciating (although not as much as other areas).
-There currently isn't much maintenence considering the property is 9 years old (probably about the time to start having some things break though).

A little more info: I bought the property in 2000 so I am now beyond the 2 out of 5 year rule to avoid capital gains (shoulda sold it last year). I paid $192,000 for it, and I estimate it's value as a whole at $225,000 (not appreciating real fast) or as condos at $125,000-$135,000 for each side. Also, it seems to me the market for condo's is slowing down a little, and the rental market is improving a little.

So, after all that, anybody have any thoughts, tips, or advice?

Thanks,
Keith