All Forum Posts by: Joseph Lucido

@Carl Fischer Thanks, that is pretty much my scenario, split everything 50/50.  Good  to know that option is on the table.  @Christopher Smith thanks for the info, luckily right now just doing a 50/50 agreement so nothing too complicated tax wise.  I think as things become more fruitful down the road we may have to get creative with CPAs to figure out how to optimize each of our tax earnings. For now things should be pretty simple.  

Hi, so a partner bought a duplex back in February. He was able to purchase with a low down payment. We had an agreement that we would split the closing costs/down payment for a 50% share in the property. Agreement is to split profits 50/50 as we co-manage the property together. When it was bought though we decided it was best to put solely in his name for the title and mortgage for financing purposes. Now I understand from a legal standpoint that most people would warn against this kind of handshake agreement, which I wouldn't recommend to anyone either, however we wanted to jump into it so that is where we are. We now have an LLC together for all of our future deals, but this property remains outside of it. When it comes to tax time what is the best way to go about it so we can split the the tax advantages of owning a rental property together? Can I take 50% of the depreciation of the property along with the profits? Should I come up with another strategy where he takes 100% of the depreciation now, and later when we roll it into an LLC then I claim the depreciation at a later time. In the end we are both open to whatever and what makes the most sense. Just wanted to pose the questions to you guys before talking with a CPA, and see if you have seen it before. Thanks for your inputs!!!

@Eric Teran and @Account Closed  I understand that logic, but we are also looking to gain a 100k in equity by redoing the basement as well.  We figured even a 15 year loan for the work at a rate of 4.5% we are still breaking even and then straight cash-flowing after. Also, we are going to have to sink money into our basement for foundation, tuck pointing etc anyways. So we see it as why not redo it all and add living space to the basement while we are at it to get an additional unit out of it plus the rent that goes with it.

@John Hickey Thanks for all the information. I will def take it into consideration. I believe the extra sq ft is worth the money here in Boston.

@David Barnett It would be approx 1100 sq ft. So pretty spacious for a 2/1 here 

Interesting, thanks guys. We are definitely going to go about this the right way by getting lawyers architects etc and getting it approved by the city. I think as long as we don't meet the chronic dampness requirement then it can be considered as fit for human habitation unless you guys have seen otherwise.  I'll look to speak with an appraiser to see if that 3 sides below grade applies to multis here in Boston. From what I've researched and been told it doesn't seem like it, but I know there are a lot of unknowns out there.  Appreciate the help so far!

A fellow submarine officer and I luckily got stationed in Boston together at the same time. We bought a 2-family in Somerville equidistant from both Davis and Porter squares. We are both independently remodeling our separate units (I own lower, he owns upper). Before we condoize the property, we are deciding if we should completely redo the basement and turn it into its own separate 2 bed 1 bath apartment. Estimates from contractors range from 150k-200k for everything. Scope is digging out basement, tuck point, permits, architect, engineer, chimney removal, re configuring HVAC, and everything else. We think we could rent the basement unit somewhere between 1800-2000 a month.

My questions are:

1. Do these numbers make sense?

2. Has anyone in the area seen this and know if it is a worthy investment

3. If so, any tips or advice (especially when it comes to permitting in Somerville) or any other contractors recommended for the job.

Appreciated all the help from BP!!!

Fellow submarine officer and I luckily got stationed in Boston together at the same time. We bought a 2-family in Somerville equidistant from both Davis and Porter squares. We are both independently remodeling our separate units (I own lower, he owns upper). Before we condoize the property, we are deciding if we should completely redo the basement and turn it into its own separate 2 bed 1 bath apartment.  Estimates from contractors range from 150k-200k for everything. Scope is digging out basement, tuck point, permits, architect, engineer, chimney removal, re configuring HVAC, and everything else. We think we could rent the basement unit somewhere between 1800-2000 a month.

My questions are:

1. Do these numbers make sense?

2. Has anyone in the area seen this and know if it is a worthy investment

3. If so, any tips or advice (especially when it comes to permitting in Somerville) or any other contractors recommended for the job.

Appreciated all the help from BP!!!