All Forum Posts by: Daniel Francoeur

My brother and I are purchasing a lot that has two buildings on it as an investment property. The property is in Pawtucket, Rhode Island.

There is only one deed for the lot. 

We are getting a lot of different info from different insurance agents on whether we need 1 or 2 policies.

Obviously, we don't want to pay for two policies, but we don't want to risk being insufficiently covered.

Appreciate and comments/feedback.

@Joseph Weiss Hey, any updates on what you went with?

We have a similar situation here where we have two properties on a single lot.

We are getting a lot of different info from different insurance agents on whether we need 1 or 2 policies.

Obviously, we don't want to pay for two policies.

We are buying in Pawtucket, RI.

Appreciate and comments/feedback.

@Dave Foster that is a great example. I wonder how many of those opportunities go missed a year. I was even talking with my parents about their secondary residence. If they do some planning over the next few years, they could even 1031 that property. With the increased uncertainty and recent stock market losses (if you sold at the wrong time), I'd hate to see someone lose out on an opportunity to decrease that tax bill significantly.

Oh man, I didn't know the QI had to be identified at close. A discussion about 1031 exchanges needs to be on every real estate person's checklist.

  

Sometimes the market is just right and you find a great buyer. You unload the property, because how can you pass the offer up. 
I've seen some owners sit on that cash, very happy with the profit, but don't end up taking advantage of a 1031 exchange or like-kind exchange (a rule in the tax code which lets you defer the gain on the sale if you are also purchasing a property in the same class - google search for a more comprehensive definition!).

One story I heard a few years back from a CPA, was of a client who had farmland in Oklahoma. This farmland had been in the family for generations. It was finally discovered that the land was located on top of an oil deposit!

They sold the land for a mix of property/cash making part of the sale eligible for a 1031 exchange.
BUT, they weren't alerted to this fact until a chance conversation over dinner with a VP of Tax friend of theirs. (Their first CPA hadn't flagged the opportunity)

Instead of having to swallow a huge TAX expense in that year, they were able to defer millions in tax liability.

Wondering if anyone has similar stories of finding out about the 1031 exchange just in the nick of time.
Or the flipside, missing out and learning a lesson for their next sale.

@Ron Brady cutting out security deposits altogether is definitely one way to go about simplifying things, haha!
Will be interesting to see how you feel about sayrhino after having to exercise your rights. I've heard some good things about their process/customer service!

Some tenants I've spoken to, use security deposits and the ability to pay a security deposit as a bit of a litmus test for a good renter, but I can see how those types of products can open up the number of tenants you can accept!

@Stephen Kehoe you are onto something there. Maximizing transparency is important. If you install a brand freaking new carpet right before a new tenant comes in, you aren't expecting to have to dole out $$$ after a year or 2-year lease.

It is awesome you have payment records and cost accounting that is that detailed! I'm sure that the organization pays dividends, too.

I forgot about the itemized deduction, that's another checklist item to make sure you aren't sitting in small claims court later on.@Stephen Kehoe

So much required for security deposits, it is a bit of headache for something that doesn't generate revenue.

Depending on State you might need to deal with:
Separate bank account
Interest Payable
Return on time
Send all information about security deposit deductions to avoid liability
Applying security deposit for rent and then monitoring the payback period
Accounting

RE: Accounting, when I was managing about 30-40 security deposits a month, my team did the following:
1. Take payments via Stripe (yes, you have to pay the fee, but it was super easy to set-up)
2. Export stripe data to excel
3. Manipulate excel so that it can be formatted for journal entries
4. Import into Quickbooks via TransactionPro

Does anyone have comments on how they are solving the rest of these issues?

Would love to chat in-person, too! Just DM me.

@Mitch Messer  good call! This unit is most likely exempt!

Code Sections 44-7-31, 44-7-32, 44-7-33, and 44-7-35 shall not apply to rental units which are owned by a natural person if such natural person, his or her spouse, and his or her minor children collectively own ten or fewer rental units; provided, however, that this exemption does not apply to units for which management, including rent collection, is performed by third persons, natural or otherwise, for a fee.

Hey Justin,
You might want to check with a CPA from Georgia, I am certified in NY, but I am fairly certain it is fine if the funds "flow" through your personal account to the escrow account you have set-up. Just so long as the funds end up in your escrow account you will be fulfilling your landlord obligation.

Daniel

CPA, NY ID 122405

Hi @Shirley R., my brother and I grew up in West Hartford and have been looking into a few areas in Hartford where we could invest in a multi-family property.

We've started looking at a few neighborhoods: Parkville, Frog Hollow, and South Green. It seems like you've been focusing on the South End, curious to know attracted you to that area.

I guess what I'm asking is - is the answer to your original question, "Multi-Family in Hartford - Should I?", still a "yes"?

BTW: I appreciate your posting! We've learned a lot from your threads/posts.