All Forum Posts by: Andrew S.

 I agree with Dawn.  Rent assumption is too high - unless you plan on putting in major upgrades, you won't likely be able to bump them up that much.  The property (if I have it pegged right, and I think I do) is on what I would call "the wrong side of Lake Wheeler Rd".  The West side is all good, the East side is not.  That neighborhood is not ALL bad, but it is (in my opinion anyway) one of those places that can change from B to D and back, in the space of a half a block, so you really have to make sure you understand what you are getting into.  Also check out whether the Wolfline (NC State bus system) runs up and down Lake Wheeler Rd.  If it does, then that is a plus for attracting students.

 So, she's been living there for 6 weeks without water and electricity and just noticed?

Oh, I did not realize that it will be OO - I don't think my DFE suggestion (above) will work for you then. Sorry

 Consider looking into the "Delayed Financing Exemption" option.  This allows you to recover your cash quickly (no seasoning requirement - in fact, you must complete transaction within 6 months of purchase).  Borrow up to 100% of original purchase price plus closing costs.  Works best for properties that require significant rehab investment.  

The DFE rules start at the bottom of page 193 of the selling guide (thanks to @Chris Martin for the link to the reference!): https://www.fanniemae.com/content/guide/sel041514.pdf

 This sounds eerily familiar.....  I just had exactly this problem a few months ago (cleaned everything, touched up paint, and it started to smell like vomit - got worse by the hour too!), and it turned out to come from the microwave!  I have no idea what the previous tenants did to mess this up (microwave was brand new when they moved in) but I ended up having to throw away the appliance and replace it (took it out of the security deposit and didn't hear any complaints, so chances are they knew the "present" they left behind....)

Agree completely with @Jon Holdman comments.  

Check out Stephen Fishman's "Every Landlord's Tax Deduction Guide" for a in-depth explanation.  

One way to overcome the phase-out of the deduction is to become a "real estate professional".  The IRS imposes very strict definitions on this (minimum total number of hours per year you work on real estate related activities, as well as more than 50% of your total combined work hours have to be devoted to real estate, etc).  So this is very hard to achieve if you hold a full-time regular job.  Nevertheless, if you do qualify, the phase-out as well as the 25k limit will disappear.

For most "mortals" its likely best to bite the bullet now and use the accrued deductions in the future, as detailed by Jon.

 Yes, as Art says, there are huge safety concerns!  

As far as insurance, there is no concern - you simply won't have any insurance coverage (regardless of whether you pay the premium or not), because your carrier will refuse to pay claims once they figure out you had improperly installed electric wiring

 I believe it does, but like most things, I'm sure it's up for interpretation.... perhaps @Steven Hamilton II can shed light on it?

@Brent Causey

I see what you are saying - it's not a default risk for you because you can cover the loan with other funds, if needed.  Got it.

As far as to whether the LLC really will or will not protect you (and your land) from liability claims, there are many, many threads on the forum on that subject. Read some of them - it's fair to say that opinions vary widely on that point.