All Forum Posts by: Jordan Decuir

Welcome Anita Lewis ! Fellow Houston-area investor here. The BP podcasts are awesome to learn from and get inspiration. I also recommend attending some meetups (perhaps use the Meetup app and search to find some local REI meetups) and I've heard folks recommend attending seminars and workshops at places like RICH Club and Lifestyles Unlimited as they can also provide valuable information and networking opportunities. Beware that some may be pitchfests however. I wish you the best of luck.

Does an investor who manages his own rental property need to qualify as a Real Estate Professional (from an IRS perspective) to deduct a portion of his or her principal residence's mortgage payment due to maintaining a home office?

I am thinking if using a self-directed IRA to purchase my next rental property. I am just now looking into the subject for the first time, so maybe this is a stupid question: Can I leverage the IRA funds with a conventional bank loan on the purchase? E.g. Can I take $25,000 of self-directed IRA funds, use that as 25% down and obtain a Fannie/Freddie mortgage loan to purchase a $100,000 property?

@Louis Mannikko I think this is a great idea, when weighed against everything mentioned here. We plan to utilize 401k "loans" as well to assist in carrying out the BRRR strategy as well. I like to think of it as a revolving credit facility where I am the bank and I don't have to rely on an external credit committee and the associated red tape to draw from the facility

Not a CPA or tax professional or expert...but in the year in which you purchase the home you should be able to reduce your taxable income by any points that you pay on your mortgage loan...Also, you will be able to reduce taxable income by the amounts that you pay in property taxes as well as interest on your mortgage loan in the current year as well as future years. Not necessarily as good as it sounds due to having to meet the standard deduction, which is around $12k or $13k for families, I believe, before any real savings kick in. Tax credits are also offered for purchasing and installing certain items, many of which tend to be "green" products, on and/or in your home. There should be lots to read on Bigger Pockets (and elsewhere on the interwebs) in terms of a home purchase and the associated tax implications...good luck!

I'm sure just about every term will be negotiable when dealing with seller financing. The answer is always "no" until you ask

I think it is a great idea to present a couple of different options to sellers, one of which could include offering a few thousand dollars down and pay the remainder of the purchase price over time, with agreed-upon terms like length of loan, interest rate, amortization, balloon payments (if necessary). I believe that many local realtor association purchase and sale agreement forms include some seller financing terms in their financing sections. Maybe start there? If there is a title company/escrow agent that you've worked with in the past that would be a great place to start as well. I would think that many or most full-time title/closing/escrow agents have at least some familiarity with seller financing on deals and can probably at least point you to someone that can help such as another investor or real estate attorney with experience structuring seller finance deals. 

I would leverage the cash to purchase additional unit(s). An overly-simplified way of thinking about it for me (but a good place to start) would be: I will see an approximate "return" of 4.75%, ignoring taxation effects, by paying the mortgage off...if I instead leverage the cash to acquire additional units, will I see a return high enough to justify the additional "risk" of taking on more units and/or more debt?

This is a great question. I too am considering using seller financing to acquire my next deal and wonder about standard practice around realtor commissions on seller finance transactions. 

This is something that I have sturggled with a bit as well...as a Finance professional I understand the power of leverage that REI offers but still find myself thinkibg about using some of the monthly cash flow to accelerate principal paydown. I have resisted thus far and will continue to do so. My advice is: you seem young so stash that cash to plow into additional units.