All Forum Posts by: Kim Leduff

Hi BPers!

For those who BRRRR or plan to BRRRR, how do you account for the risk associated with a possible real estate market crash during your rehab stage? For instance, if you take out a 100K short term loan (to cover house purchase plus rehab costs) with comp ARVs of 160K, and the ARV drops to 70K because of a crash.

Is there any protection against that potential loss of value? how do you pay off the short term loan, worst case scenario?

best,

kim

Hi BPers,

We are hunting for investment properties and in the meantime have a significant amount of cash in our checking accounts ready for when we want to pull the trigger with a down payment. I feel like there could be a better way to earn interest on this money while we hunt. One idea was to put it into Index Funds for the time being. Another idea is to put it in a high yield savings account (Some credit unions have 3% on amounts above 20k for instance). I'd love to know best strategies.

More Info:
This is for additional investment properties
Hunting can take 3-7 months
Amounts above 20k+

@Frank Chin Thank you Frank. This is so helpful!

Hi BPers!

I bought a place 10 years ago for 230K and decided to rent it out this year when I moved.  This year I get to start deducting depreciation on it on my tax return. What is the basis I should be using to track the depreciation? Is it the 230K (assuming building-only, ignoring land for simplicity) or is it something lower since its already been around 10 years? Do I need to back out the 10 years of depreciation from the 27.5 asset life in order to calculate this year's deprecation (as in using the depreciation figure from Year 11 out of 27.5)? 

Also, Does a cash-out refi change the equation? I did a cash-out refi two years ago and now the debt is 250K & FMV 500K.

Thanks!

Hi! How are you guys tracking your deprecation? Which software are you using? Or are most of you strictly relying on your CPA? Id like to track myself and be aware of my tax deductions. 

Thanks in advance for your help :)

Kim

this is all sooo helpful!! thank you guys. It does seem like my expenses will mostly be cap-ex.

ohh I see. that makes sense

Can my home office deduction be taken on sch E? How are investors taking this deduction is they do not have income to report on a schedule C?

any advice would be great!

Hi BPers,

When it comes to tax time, were are you accounting for your rental property search expenses? the house hunting expenses? Are you putting them on schedule C since they arent necessarily assigned to any particular property?

Same with a real estate course I recently took?

Thanks in advance!

Kim

Hi All!

Im in the process of converting my garage to an ADU that'll be fully rented within the next few months. For tax purposes, all the expenses I'm incurring are deductible right? can I put them on my schedule E for this future address? Or is there no tax deduction allowed for pre-expenses? side note: I also already have 1 other rental property that is up and running in a different city.