All Forum Posts by: Howard Klahr

While you are clearly free to maintain your own opinion, there are many states with landlord tenant laws that do not agree with with you.

 The correct approach will depend on the state in which the property is located. You should inquire with your attorney to be sure, but in general, if you do not have a forwarding address, send it to the property address (with proof/documentation of mailing and delivery).  If they forwarded their mail it will still get to them.  If not, you have met the requirement to send a claim on the deposit within the time frame required by your state.

In the event they raise an issue after the fact you will be able to show your efforts to the court.  Also photograph everything you are claiming as damages.

It is not a revenue but rather a reimbursement/off-set of an operating expense.

 Water line in an un-heated attic space will run the risk of a burst pipe due to freezing. 

As far as the repair under the salb, you want to also investigate the property insurance policy and see if any of it is covered to help off-set out of pocket costs.

Less strict - No, appraisal standards are appraisal standards

How much value will they take away? - None, they will report what ever value is warranted for the type of assignment.  Do you know if the appraisal was ordered to reflect the "as is" condition of the property or "subject to completion".  If the appraisal is to be based on an "as is" basis, the value opinion will reflect a partially finished basement (something more than an unfinished and something less than a finished basement).  The specific amount will be determined by market data abstracted from the local market area.

If the appraisal is "subject to completion" the the value conclusion would assume that all of the work proposed is finished and all necessary approvals have been obtained.  If this is how the appraisal is performed, the lender will likely require a re-inspection upon completion and won't fund until after the work has bee done.

Environmental issues, continued viability of the quick change business at that location, special use property improvements do not readily adapt to an alternate use, lack of credit quality of tenant

Now this is not to say that this is not a worth while investment, just that these are issues to consider

OK lets address a couple of issues here.  First of all in your example, you acquired property A for $200k and over 5 years accumulated $50k in depreciation.  I know it is just an example but lets bring some perspective to the example.

The $200k includes land value, which is not part of the depreciation calculation.  So to clarify your example the $200k would be less an allowance for land, lets say $50k (25%) just as an example.  So the remaining $150k is what would be depreciated.  The IRS only allows the depreciation to be over 27.5 years for residential and 39 years for commercial.  So that would mean the applicable depreciation over 5 years would be either 18.2% ($27,273) for residential or 12.8% ($19,230).

The above information excludes any additions to the basis for capital improvements as previously mentioned but the rates of depreciation remain as well as having to net out the land value.

Now the gain on the property will be based on the sale price at disposition less your basis.  The basis will include recapture of depreciation as well as a few other adjustments to determine the taxable gain.

If you were doing a 1031 exchange the taxes applicable to the gain are deferred if you acquire sufficient property to off-set or exceed the gain.  As also previously noted the taxable basis to commence the depreciation on the newly acquired property will be the basis of the newly acquired property less the allowance for the land value of the new property and depreciation broght forward from the sold property.

The complexity of the transaction is why the assistance of an accountant is necessary to structure the transaction.  If it is not properly done the entire 1031 benefit can be disallowed resulting a large tax bill due now.

While not specifically real estate books, anything by Harvey Mackay is well worth while:

• Swim with the Sharks without Being Eaten Alive
• Beware the Naked Man Who Offers You His Shirt,
• Dig Your Well Before You’re Thirsty
• Pushing the Envelope
• We Got Fired! . . . And It’s the Best Thing that Ever Happened to Us
• Use Your Head to Get Your Foot in the Door
• The Mackay MBA of Selling in the Real World

OK I am a  bit late to the party but here is a list of resources to get you along your way

http://negotiationexpertise.com/blog/reference-mat...

OK I am a  it late to the part but here is a list of resources to get you a bit along your way

http://negotiationexpertise.com/blog/reference-mat...