All Forum Posts by: Account Closed

Hello BP community, 

My wife and I work w-2 jobs and own 3 rental properties... nothing crazy. Is it normal for my CPA to be charging me $3,000 to prepare our tax return? This is my first time using a CPA and I don't know what is considered normal. But I feel like something is definitely off here. I have other investor friends who pay $400-$600 to their CPA and they own multiple properties. Thoughts?

Best, 

David

@John Sobaif you know the product you need but just need it in a specific state try posting in that state forum. Bigger Pockets has some great state forums and usually there are good locals that monitor those. Also, try some local real estate meetup groups. Meetup.com is a good resource for those but some of the groups will also post here on Bigger Pockets Marketplace too. Even facebook might have some good local groups for you. But post locally for this. That’s the best bet.

@Harmonie Borden

Get a copy of Wendy Patton's (she is on BP actually) book, Investing in Real Esate with Lease Options and "Subject-To" Deals.  Extremely informative.  I'd don't recall any marketing/upselling.  Just tells you how she did with the pros and cons.

In the meantime...  When you purchase a property "subject-to," you are purchasing subject to the mortgage.  So, the mortage stays in the seller's name.  You need to get Power of Attorney over this mortgage so that you can deal with the lender otherwise they won't take your calls.  You never know..  The seller may just disappear on you after the deal.

So, this means the seller's credit score/history is in your hands because the agreement will be that you are making the mortgage payments.  Also, the seller will have a tough time buying another property since this mortgage is under his name --- their problem.

Now, you have a property encumbered with a mortgage under somebody else's name.  This is a pretty "powerful" technique when you look at it, but its too 'advanced' for me and this sort of deal doesn't quite exist around me, at least not that I've found.  So, it depends on what you do next with the property.  As I recall, I think her strategy was to rent them out and refinance them after a couple of years since she was using the established rental income to support the loan application.

Thats the short of what I remember right now..  Good luck.

@Account Closed I'm not sure I know what you mean by treated like earned income, but net rental income is taxed at your ordinary income rates whether it's a short or long term rental. Also, there are rules with STRs that can change the tax implications, such as the average length of stay of your guests (less than 7 days = nonpassive activity) and whether or not you provide "substantial services" (doing so would convert it to a self-employment activity). Further, there are separate rules if you occupy the property personally, whether at the same time as your guests or at separate points throughout the year.

Hello BP. Is talking with a potential lender and I suspect a scam because the numbers just don't add up.

I was provided this information:

Loan Balance:  $250,000.00

Loan Interest Rate:   5.00%

Loan Term: 25years

Numbers of Payments: 300

Monthly Loan Payment:     $833.34

Balloon Payments:  $238,346.82

Total Interest Paid:  $24,508.64

Does this mean that after 300 payments of 833.34 we would be completely paid off or

After 300 payments of 833.34 we would then be required to pay an additional balloon payment of 238,346?

Please tell me your thoughts and I appreciate the insight.

@Justin Gottuso That's a loaded question, since NPOs have specific rules and standards. The short answer is that NPOs are allowed to pay their board members a salary, but I would consult an attorney and tax professional who specialize in this arena to make sure everything is done above board.

@Jayden Hamilton in theory you are correct.  No income means no taxes. 

Hello everyone, 

I’ve got a quick question that may apply to many of you here. We were getting a new home built and after 8 months the builder cancelled our contract due to “disputes in quality”. Our original contract allowed them to cancel the contract via that clause but they needed to return our deposit. They have refused to return our deposit until we sign further agreements (NDA, confidentiality etc) which was never included or required in the original contract. They have listed our new home for sale and actively looking for a buyer. 

Now, can I record a memorandum of agreement for the home to our county’s recording office to cloud the title until I’m returned my money ? It’s been two months of asking them for our deposit back and they refuse until we sign more documents which our lawyer immediately said wasn’t required. I consulted with one other attorney and he also said we don’t need to sign anything per the wording of the original contract. 

Alright. So after 2 stressful weeks and hefty losses due to delays from lender we have finally signed the closing docs and wired downpayment to escrow. Literally, the only thing left is for lender to send the wire to escrow. Anything left for my lender to screw up or can I sit back and relax? 

Can you do short term rentals in the subject city? IF so that's highest income production. You need a team though to pull it off (housekeeper, handyperson, inventory) If the one sister has strong emotional ties to the lake house refinance and pay off 1/3 less fees to the one who wants out. Get your accountant to also figure what she would net if sold for say $800000 less commission and CAPITAL GAINS. Get her to agree to a number in writing before you refinance.