All Forum Posts by: Roy Gutierrez

Thank you @Joe Splitrock,

I got very far behind because I was holding a very busy full time job and went into vacation rental business with multiple properties and some renovations as well, all at the same time. It was a mountain of paperwork that I had all over the place, so after I quit my job I started playing detective and putting everything together and now I'm kind at the end of the road, a little bit smarter about accounting but not enough.

I bought the property on Mid december 2013 and after a few months renovations it was rented on 5/1/2014. I guess I have to read up on what makes an asset that depreciates (which if I remember correctly is mostly renovations) but fixes not sure, I have to ask my accountant to clarify this, his current answer doesn't give me any answers, just wanted a bit of a feedback from an investor viewpoint. 

Hi @Vlad K.,

Thank you very much for the feedback, I appreciate it. Yes it was related to 2014, $30,300 (repairs $11,792, supplies $8,329, the rest were renovations and other stuff). I did make 82K on my W2 that year as well and also I did have make about 4K as a 1099 for freelance computer programmer.

I guess he's very busy, I've asked him a couple of times that I will pay him to meet with him and get my accounting in total order but he never responds. I did try to find someone else, more responsive but he was a newbie so went back to this accountant. I definitely need to sit down with an accountant and go over everything and of course willing to pay.

Hi guys,

I just got my taxes done by my accountant and it turns out that I have to pay over 3K for 2014 (yes I was waaayyy behind but finally got my act together and pulled everything into an accounting package). Unfortunately I'm very ignorant with my accounting and now I'm paying for it. So basically I'm going over what he sent me, I started analyzing the Schedule E that has my 3 rentals and noticed the total expenses are WAY lower than what I gave him on my reports, so below I give you the example of one of the rentals (all 3 have the same characteristic, my accountant has expenses WAY lower than what I sent him on my report):

House 1 - long term rental - Schedule E (house bought in 12/2013)

   Income: $9,346

   Expenses declared by accountant: $9,992 (this is what he somehow figured out)

   Now on the report that I gave him my total expenses are $30,300 (repairs $11,792, supplies $8,329, the rest were renovations and other stuff), so there was a lot of work on this property.

I asked him why the difference and his response was:

"I made some assumptions in the earlier years about capitalizing costs vs. repair costs. I capitalized a lot of the expenses because prior to renting you're supposed to put it into the depreciable base"

Now before responding to him I thought I have to figure out what the hell he means by this, so I went to the web and found this:

Capitalize is an accounting method used to delay the recognition of expenses by recording the expense as a long-term asset. In general, capitalizing expenses is beneficial as companies acquiring new assets with a long-term lifespan can spread out the cost.

So I guess he's recognizing about 1/3 of my expenses and the rest of the expenses he plans to deduct over time for future years? (what time period I have no idea, I guess I have to ask him). Does this make sense to you guys? Is this the way your accountant handles your expenses (including repairs) for your long term rentals?

Thank you very much in advance for any help/input. 

I'm also interested in seeing what you find!

I had this dilemma when I remodeled my kitchen, fell in love with super white I believe but after taking a sample home I put some wine and lemon on the sample and the next morning some nasty stains that I couldn't remove, went with a white quartz and looks great and no stains anywhere! More expensive though.

Thank you guys, I'm in the middle of finishing a project, I will be calling you guys around Wednesday. Thank you for responding.

Hi Reginald,

Sent you my email in a message.

Thank you!

Hi gang,

I just became a full time investor in Michigan, I have 5 properties (4 in Oak Park and one in Berkley), 2 paid in full, and I'm looking to find lenders; banks, hard money lenders, private lenders, etc. I've been getting all my paperwork and life in order and next week I was planning to start going to banks to get a HELOC but I might have a deal that I'm interested in and might have to offer cash asap, I want to make a quick offer and try to get this house. I'm very new to private lending/hard money lending but I'm guessing my houses (all have pretty good equity) would be a plus to try to get this type of loan.

If anyone is interested or can refer me to someone I would be very grateful! 

Thank you,

Roy

I own short term rentas, done.

@Jason Flint, have you considered making one or more of these houses vacation rentals? If they're in a good area it might be prime location and if you're willing to put the work in they might cash flow CONSIDERABLY higher as vacation rental, for the right area and the right size some people will pay top dollar. Take a look at Airbnb and Homeaway in your area and look what similar houses are charging, especially the ones with a lot of good reviews. I'm doing very well in an area that people are "surprised" that people come to stay (suburbs north of Detroit) thinking that it's strictly a quiet neighborhood with nothing going on but people have 100 reasons to travel and some are not so obvious. I'm looking right now for one near Downtown Detroit and even though I want a "deal" I would consider something that might be borderline good or barely not qualify for a regular rental because I know the demand for short term stays near downtown is crazy.