All Forum Posts by: Account Closed

Very good point Wayne.  Ashan - By "sub2" Wayne means "subject to" i.e. subject to the terms of their mortgage. 

I have a form for you to review but you should have it drafted by an experienced real estate attorney in the state where the property is located. 

Non-responsive contractors are the worst thing about this business.  Be reasonably patient with him but be ready to fire him and move on to another contractor. NEVER pay in advance for work. Payment upon completion of work. I've provided money for materials but I never pay for labor before work is completed. 

Talk to an experienced real estate attorney in Indiana. It could save you a small fortune and lots of headaches down the road.

Be sure to calculate all expenses - mortgage, taxes, insurance, landscaping, municipal rental license fees and garbage collection fees, HOA fees, etc. Will tenants also pay water/sewer bills ? Also add in a 10% monthly reserve for maintenance. Tell Mom and Dad to get out their checkbook and review each and every expenses that they have. You'll find some that you forgot. Use a rental calculator and/or review the numbers with a CPA.

I would say that there is no typical rate or terms. All terms for this type of transaction are fully negotiable between buyer and seller. 

Be sure to have the mortgage drafted by an experienced real estate attorney. The relatively small upfront legal cost could save you thousands down the road. 

I'm an attorney in Ohio and I would tell you to immediately seek the advice of an experienced attorney in your area. This is a rather complex matter. 

No. Buying additional properties are not "expenses" for tax purposes. Acquisition costs for inventory (more houses) are not expenses. 

In order to offset the high profits, you should accelerate expenses for 2016, i.e. pay as many outstanding bills as you can prior to December 31st. Pay vendors, mortgage, taxes, utilities, landscaping, etc. Pay expenses to offset income.