All Forum Posts by: Justin Larese

the IRS sees a LLC as a piece of plexiglass. It will keep the splatter of being sued from touching you personally if done right, where property insurance can provide an umbrella to help cover some liability, if it doesn't rain too hard with lawsuits, but the IRS still has you file your taxes the same as the owner unless you have partners in LLC. You will write off expenses for each property. Each property I own has a folder with everything in it with section of repairs that include labor and parts. You can get in trouble if you write off repairs for one property, but actually had the work done on another. So keep good bookkeeping. If I have misspoken someone correct me, but that's how I've been told.

You can have a 2nd home thats a "vacation" house, and be able to rent it out without being struck with investment rates. I am looking at rentals now and was going to go with a 2nd home, but area is too close and would have to be considered an investment. So now I am shopping for a multi family as a new primary home which gives me the lowest rates possible, stipulation is one unit will be my personal unit until I reach minimum resident requirements. I would tell them you want a 2nd home as a vacation get away, so the underwriter can approve it. Bc you showed up with 50% they probably assume you meant investment and prolly wouldnt care about the rates. 

Sounds like you made too much money and whatever you brought to him to file for losses was not enough to truly save you. There are new tax laws, which are going to help and hurt people depending on what side of the coin you are on. Not nearly enough specific information to assist, you could opt to have another CPA look at your taxes for a 2nd opinion if you think your current is not trying to look out for your best interest, though typically a CPA wants you to have larger returns to charge more for their services.

Everyone is different and there is no one mold fits all. Nick above went right into a LLC, where as I did not. I made sure my insurance had extra liability. There are also umbrella insurances as well. If you are buying a house for house hacking in a duplex/ multi or staying put and buying a rental you will have different advantages with interest rates, down payments, etc. I agree with Nick and would recommend building up your team. Start with a CPA who can help you figure out specifics with the direction you wish to go. Find a good lender who is easy to work with, Then work on finding great real estate agent who can help you start looking for what fits your business model. Good luck.

investment properties will have higher rates, but if you say you are looking for a 2nd home and its further than 50 miles you should get a lower rate. Especially if your bringing 50% to the table. Unless your credit is not great, or your debt to income ratio is throwing you off. Is the property a single family or multi?

Best advice I have heard on bigger pocket is simple is better, and those who fail usually get too fancy. Whatever you decide make sure you are confident in the decision. Youre able to put 50% down and the best they can do is 5%? Is the property too close to be considered a 2nd home?

I would avoid the language and keep per person/ occupant. Max of two occupants per room, with their names or per pet with their name, deposits as needed. Why risk getting into the controversy of what is considered a heartbeat? You going to upcharge pregnant women? You want to keep it simple and avoid anything that gets you into a pickle with the fair housing laws.

In high demand at a class B could you not look at raising rent to give you more room to cover capital expenditures? I'm assuming SF at $200 cash flow after accounting for capital expense, maintenance, and PM. How much would you try to sell for? You usually lose more than you think when selling, once you pay fees, and you get blasted by the home inspection and additional requests from buyer.

Older homes typically will have higher capital expenditures, but if a home is well taken care of you can do well on them. I'm currently looking at a 1920s multi house now and am hesitant bc I am still running repair numbers to see how much room for equity I'll have. If your numbers look good and you can put in an offer and contingency for inspection and appraisal so you can walk away if repairs are too much or if the equity does not produce. Keep in mind older home walls are not just 2x4s and Sheetrock so knocking one out to make room will be more work. Make sure the electrical is updated or plan to update. Windows should be updated or plan for it. Look at utilities and rent roll, is current landlord paying utilities? Older homes typically take more utilities to keep warm or cool if windows are old and let air out. Separate utilities? Just due your due diligence and you will know for sure. Good luck 

I've been in your situation and know the anxiety it brings. I had my first home and used its equity to buy my 2nd home and rented the first one out to help cover both mortgages. The time between the transition and finding renters was knuckle gripping to say the least. Remember the 4 pillars of real estate. As long as you are making money on your first, or breaking even you are still making equity on the first. I would advice trying option 2 first. If it doesn't work out you can always default back to option 1 and sell. If you can make option 1 work, in the long run you will be in a better position