All Forum Posts by: Greg Kasmer

Mario - Taking a "paper loss" because of depreciation is typical from my perspective. Ideally, you want to be cash flow positive (not including depreciation), but then be negative when including depreciation as you can use the paper loss to reduce your tax burden. However, just remember that at some point in the future you'll likely have to recapture that depreciation when you sell and pay tax on the difference between your sales price and the amount you have left to depreciate. However, until that point this view of the Schedule E looks good to me! 

Theodore - I don't recognize the color, but I would send the photo to a couple of "big box" stores and see what they suggest. They typically have a "designer" or "consultant" for free that can give advice (or research in your case) specific items. I would suggest Home Depot, Lowes, Menards, Floor and Decor, other flooring distributors in your area, etc.... I would start local and expand out from there. Also, you might want to take a piece off in order to bring with you to the store or even find the item # at the bottom. Good Luck!

Brian - I've added air conditioning to HVAC when I needed to replace the gas heater in houses. If the heater is working ok, I typically then just tell the tenant they'll have to install window units for air. However, if the furnace is 20+ years old and likely to need to be replaced soon, I'll go ahead and replace the unit and get a new unit with air (evaporated coil and condenser). The only problem I've run into sometimes is that existing ductwork was not exactly "made" for air conditioning so the location of the returns and vents is not ideal... so certainly rooms may not be as cool as other rooms. I typically get about $75 per month rent bump with air conditioning. Good Luck!

Vinny - I would say that if you're next deal will be a BRRRR you have a couple options for finding the funding, including: 1) Taking a HELOC on your primary house assuming that when you refinance you'll payoff the HELOC, 2) You can also use a loan from someone else like a private lender (friends/family) in which you pay them 10-12% for the use of their funds, OR, 3) You can use a hard money lender in which the rates are a bit higher and there will be some points added as well. In either scenario you'll have to make sure you have the funds from the refinance to pay them back. Good Luck!

Wilson - I agree with Kai on using a broker for this specific situation. I've recently got a quote from Steadily and have been happy with their estimate and services thus far. I would suggest reaching out for a quote!

Kevin - I agree with Matt and have done something similar with asking basic questions to confirm that the inquired person meets the criteria. An important point is to use the same criteria for everyone and ask the same questions in the same manner. I typically weed out about 50-75% of the inquiries with just confirming the basic criteria. I then hold an open house/showing for those that qualify based on the criteria. Good Luck!

Andrew - I think you've accounted for a majority of your costs, but just a few others to consider include: vacancy factor (typically 5%), turn/over or releasing expenses, and property management fees (7-10%)  - whether you pay someone else or do that yourself you might want to include in your calculation. I see that most/all lenders include vacancy in their calculation, whereas the other two expenses are sometimes included - depends on the lender. Good Luck!

@Dan Bowe - I've lost a few deals that went "all cash" between the $1M-2.5M range. Now, I'm accustomed to just asking the broker up front whether he anticipates an all cash offer to save time. I still underwrite with a debt assumption, so it doesn't make sense for me to spend too much time on a deal if there is a good change of an all cash purchase. My guess is that the broker is being honest with you and she/he does have an all cash buyer. Good Luck!

Nik - I've applied to Fundbox but eventually was turned down. They have very specific requirements of how much revenue they want to see on a monthly basis as well as the frequency of the deposits. I had better luck with traditional business lines of credits with banks. Good Luck!