All Forum Posts by: Hudson Doyle

I'm new to TLCs and wondering what is involved after one successfully purchases a TLC via an online auction?  Assuming the debtor repays the taxes + interest, what is involved on the TLC buyer end of the equation?  Does the county take care of the accounting and everything or does the TLC buyer have to get involved somehow?

thank you very much for providing these clauses.  I would love to see how you present the rest of your lease.  Please message me. Thank you.

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Great job.  Man, costs are far lower in your neck of the woods.  In Boston, replacing all windows would just about eat up that entire budget!

thanks all.

land/improvement value is taken from the town assessor database. i wish it was different--i.e. for depreciation expense.

despite this not quite fulfilling the 1% rule, it operates at a 7.7% Cap Rate and 7.2%Cash on cash return, with a 15 year mortgage at 3% mortgage.

Can't say I really have much to document further expenses (personal management, travel, etc.), so not sure if more can be done there...?

So I guess I'm learning that money being transferred into equity is money one has to pay tax on up front (and then again upon sale...).

Right, sorry, #'s would probably make this easier for all who view to understand.

Purchase price: $205,000 Loan amount ~$150,000

2013 #s

Rental Income: $19,535

Mortgage interest $4,415 (Actual Mortgage payment: $12,672)

Tax: $2,774

Insurance: $668

Depreciation: $3,700

+a few various expenses

Total income: $19,535

Total Expenses: $12,275

Taxable income: $7,261

Actual Income: $3,321(including mortgage principle payments)

So the IRS will tax me on about $3,940 more income than I actually profited. Is this not what most people face in RE investing-- A larger taxable income than actual income?

I bought a 2 family the end of 2012 and have now completed my first year as a landlord. My accountant recently provided me with my Schedule E tax return for 2013 and I was surprised to see that my taxable income is far greater than my actual profit. I gather this discrepancy is chiefly due to the principle payments on my mortgage. That is, the rental income minus expenses, depreciation, mortgage interest, etc. (but not minus mortgage principle payments) leaves a larger income than I actually took in as profit. This was a surprise to me, as I thought REI generallly helps reduce your tax exposure, but somehow this discrepancy didn't occur to me. And it appears to me I will be paying taxes on money I did not in fact take in.

Am I missing something or is this often the case?