All Forum Posts by: Kyle Meyers

I'll have to do some more research on the bump keys.

I will be changing the locks once I get in, I just need to get in first. Trying to do as little damage as possible in the process. I would like to keep from having to pay a locksmith to come out and if I can find the keys, or use a bump key to get in cheap, it will be much less hassle for me.

Thanks for the tips.

Those of you who buy tax deeds or foreclosures, what is the best way to get into the property once you own it? I am about to take possession of 2 tax deed properties which appear to have been abandoned for a year or more. Is drilling the lock the best way or would it be cheaper to break in somehow?

You may need to evict them first once you get possession. Check your state's laws, but they may become your tenant when you become the owner. If they have personal property in there you will need to find out the laws about storing or disposing of that.

I am currently in college, but I am hoping to go full time into landlording after graduation in a year. I project the yearly gross rents will be about $90k, so that would be $45k with the 50% rule. About $15k in debt service leaves me with $30k annual income, not great, but its enough to live off.

I do not currently own my primary residence, but I would not hold it in an LLC, just protect yourself with an umbrella policy and good business practices. If you don't act negligently, you greatly reduce your chances of ever having someone win a judgement against you that would be able to effect your home.

I currently do give my home address to my tenants. I am not worried about them attacking me or anything like that. I will likely only give a PO box once I move to a more permanent residence though. I currently live at least an hour drive from my tenants so it would not be easy for someone to come all that way to confront me. When I live closer, I will shield my identity a little bit more, but just enough that someone would have to work a bit to find out where I lived.

I use google voice. I use it so I can have a separate voicemail for my tenants and applicants to hear. I would also be able to change where it rings if I get a virtual assistant or something in the future.

Check your state laws, in some places the owner's address must be in the lease. You can usually get around that by owning property through an LLC and listing the address of the registered agent.

Steven,

How do I determine which property to depreciate them under? For example, I buy a cordless tool set for $200 to do work on property A, but a few months later, I use the tools at Property B. The following year I buy property C and use the tools there, etc, etc. Do I depreciate under property A since that was the original use? Or split under properties A and B since I could reasonably foresee use at each of them? What about when property C enters the picture, do I have to change where the depreciation is reported, or does it stay just on A and B?

Would this change if property A is a single unit and B is a duplex?

I have been looking into the management entity, but there are several reasons I have decided not to go down that route at this point in my investing.

I would suggest first looking at other flooring options. Laminate or tile will hold up better. If those are not an option, and you are going with carpet, I would say a cheaper carpet is probably best. It will depend on what level of rental you have, but I would put in something that I could afford to replace every time I had a tenant turnover. If you buy the more expensive carpet with plans to clean it, you may end up having to replace it anyways. Put in something that is nice enough for the property, but not too expensive. I have heard putting a better quality pad will make the carpet feel much nicer without killing your budget.

Rob,

How did you go about offering this? Did you mention it as an option to tenants when you were showing the property? Did most of your tenants move and take the appliances after one year, or did they stay longer?

Steven,

If I buy tools which will be used in connection with all of my properties. I would depreciate these on schedule C correct? Does that cause a problem in regards to self employment tax since I would be reporting a schedule c loss, but a schedule e gain?

Steven, when you say the property taxes at closing will not go on schedule E, you mean they will not be listed there, but they will effect it later correct? So as Dave says, the amount on schedule E will be less because I will not be incurring the expense, but rather paying off the liability I assumed at closing.

Would these journal entries accurately represent what is happening?

At closing:

Debit new property basis $12,000
Credit cash $11,000
Credit AP-Property Taxes $1,000

Tax installment #1:

Debit AP-Property Taxes $750
Credit cash $750

Tax installment #2:

Debit AP-Property Taxes $250
Debit Property Tax Exp (sched. e) $500
Credit cash $750