All Forum Posts by: Mark Fedorov

@Nancy Bachety a 1031 is based on the cash out, provided that leverage of the new building is greater or equal to the leverage of the old building, so for properties that were held awhile, cash out is a more accurate way to measure it.

@Adam Christopher Zaleski SFH tenants are the same as MFH tenants, and with the college twist, your multi family homes are easier to deal with since you maintence guy is only going one place. I think you are ignoring one fact you were lucky enough not to deal with: different universities have different rules about who can be off campus and also have different schedules of when the Fall semester's rooms need to be booked. I would say sell all you got and get a multi-family, though your timing of the 1031 exchange will make is tough, you have 45 days from the date of sale to identify a property to buy, and if you have two that your selling, and one that you are buying, that 45 days goes faster than what you would think....I think that your 1031 timing would be the toughest aspect of this, to such a point that I would suggest you calculate the basis of your two properties and make a stab of the taxes you would have to pay, considering that the cap gains taxes are only payable on your 1040, you could sell your places next month, pocket the $330K and you will not have a tax bill to pay until April 2018... by then your multifamily would already be making you money. (and you would have the full deprecation of the new building)

@Lauren Victoria 

My family has worked in that area since the 80's, and prices are high, but with high prices you have a lower risk factor. My main point is that being away from your home adds risk and costs to your project that you need to incorporate in your decision process.

Yeah 80K is a tough limit to have especially since you are only looking for a cosmetic work in that area perhaps Lynhurst, or farther out.. get on google maps and follow the NJ or LI transit lines away from the city to find something reasonable.

You may want to start looking at the sheriff sales, though the times that I went went to the union county sales, if was rough.... you should go to the auctions with out any money just to see the process before you try to bid.

And to be fair... I am not sure what you consider "Cosmetic", but the less work that needs to be put into a place, the closer the sell price will be to market, so the lower potential you will have for profit.... also as the interest rates go up (thanks Donald!), the house prices will go down.

Your constraints are putting you into a box of limited potential.

I think you are going about this the wrong way, putting in credit or cash, in my book is the same thing. I would make  sure that you two had a WRITTEN understanding on the split of the costs. I would ask an important question: what is he going to charge you? Are you going to see the checks he cuts to his guys so you know he is not inflating the number? Is he going to charge for his time?.. are you going to charge for yours?

Zoning is local, so the zoning code in NY are different then in NJ or LA. You should call the local (to the property) zoning officer to get the details. 

My experience with "historic zoning" (in PA) is that if you do any modification to the structure or ANYTHING to the outside you need to get your plans approved by a special board (who are all jerks).

My professional opinion is that your wife and sister should figure out what they want done. You don't want to mess with the emotional baggage of sisters being torn apart.

Have them talk about the three options; one of you buy, both of you own and rent or both of you sell. (I strongly suggest you not be in this discussion). Start the conversation with I think it is worth $X right now, have the $x number be what you would be happy to pay the sister to get it 100% yourself and what you would be happy to recieve and give it 100% to the sister.

It is a tough path to walk. good luck.

I had a 5 story fire escape that was steel that looked horrible, I put two guys with sanders and high gloss black paint on it and a few days later we were done. since it is metal you might be able to sand out the rust and weld back any missing metal.

I would have that inspected by a local fire alarm person (they often do fire escapes also), you would be amazed at what does not need to be replaced.

Also, talk to the fire marshal to make sure any repairs you are planning are good with him, do that early, he will appreciate it.

1) Hard money loan for the down payment and closing costs

2) Sell the 50% of equity of the deal  for the cost of the downpayment and closeing costs, you would operate them and send them 1/2 the profits.

An LLC can only be represented by an attorney?... really? that must be an Illinois law.

The problem with seminars is that they give you generalized advice, the problem with generalized advice is that, it works well 70% of the time.... looks like you are the 30%

The protection that the LLC gives you is liability protection of your personal assets, so if someone was hurt in your flat and there was a fault or negligence in the building, they would sue the owner (the LLC), the LLC's insurance would pay that bill, but if the damage was for more than the insurance, the harmed party would get the flat (or the whole ownership of the LLC) and you would walk away with your home and 401K intact. That is a low probability event with a high impact (ie; it will probably not happen, but if it does, you are screwed).

Another great way of protecting yourself from this low probability event, is to get an umbrella policy. A ~$5MM policy cost like 2 or 3,000 a year. So if you are spending more than $2K on maintaining the LLCs, you should get rid of them.

The bad news is that the Flats are probably titled in the name of the LLC, so you may need to retitle them (and pay sales or transfer tax ) on them.

You need a lawyer to sort this out for you.. and not the ones who are doing your current LLC work, if they agreed with you to do this without explaining the limited liability protection concept.. they are a bad lawyer.

Have one lined up (so you talk to them and are comfortable with them) before you see the house.

If you are interested in the house, have the attorney review the agreement of sale before you sign it (yes, even though it is a standard doc, the attorney will make sure you understand what you are giving away by checking those boxes.

Easy deals should be ~$500, complex ones are more, this is something you should talk to the lawyer about,

www.postlets.com will list it on Zillow, Trulia and a few others...

The best thing to do is to go to google and type in "Room for rent in Roxborough, CO" 

and make sure you are listed on the top 3 sites that come up on that search.