All Forum Posts by: Vernon Henry

That's the problem with the short sale idea. My loan is current.
Should I stop paying the mortgage and let them foreclose?

Underwater on a duplex in a depressed so. Cal area. Currently worth about 90k (and dropping). Owe 130K. Barely breaks even because market won't allow raise in rents. Appreciation is, of course, a distant pipe dream right now.

I desperately want out, but how? I realize this is probably no-win situation, but what would be my least painful and costly option?

Hello,

I need some advice. I have a tenant who pays rent with postal money orders by mail to our PO box. They have been prompt and reliable and are good tenants. This months rent has not arrived even though it was mailed more than a week ago. At this point, it seems unlikely it will show up.

They have the receipts for the money orders. You cannot 'stop payment' on money orders as with checks but you can cancel them. However, it takes about 60 days for the money to be returned.

What would be the best way to handle this?

Thank you

Speaking of qualifying as an RE pro, my wife and I own 3 rentals. We manage them entirely. I have a full time job, but she only works part time and devotes much of her time and energy to prop mgmt. Between the two of us, we can easily meet the IRS criterea. Do you think filing as RE pros might raise a red flag at the IRS?

Jon, when you say flow through does that mean losses would be subject to the passive activity limitations that non-real estate professionals are subject to? Or would being under an LLC automatiically give it RE pro status?

Are there any tax advantages? For example, could any losses experienced by the LLC (of which youare owner) be used as deductions on personal income?

I've seen a lot of posts on this site about putting one's investment properties in LLCs. The wisdom of doing this seems to be a given.

Could some one please tell this newbie in a nutshell what the advantages are to doing this? Thank you.

Hi All,

I have a couple of questions regarding security deposits.

A tenant, who is moving out,has ruined a carpet by allowing their young children to urinate on it. Though it has been professionally cleaned, the smell of the urine persists. We are convinced that replacement is the only solution to the odor problem. How much of the carpet's replacement cost should come out of their security deposit? Although the carpet was not new when they moved in, it was in very good condition.

Also, this tenant had very slovenly habits in general and during their stay, the apartment became infested with German cockroaches. There was absolutely no insect problem before their move-in (we're sure because the previous tenant was very clean and would complain even if they saw a spider). Can we deduct the cost of fumigation from their deposit?

Thank you for your advice.

Vern

Hmm... no answers. Okay maybe I didn't frame the question properly. Let me try again.

If you are buying investment property, and assuming the seller won't pay closing cost (e.g. an auction, etc.). By default, lenders seem to want to add fees to the overall purchase price then calculate the down payment on that basis. (i.e., you'll be putting more money down and paying a higher mortgage).
If it's to be rented, perhaps you don't care since, in theory, your renters will be paying the mortgage. Perhaps it's better to pay the fees separately for a lower mortgage/down payment. I just want to get a sense of what the savvy, experienced investor does in this regard.

Forgive me if my question seemed too dumb and obvious to warrant a response, but I'm still new at this and the financing is the part where I always get the feeling I'm being hustled.

Which makes better sense, have commissions, fees, etc. added to the loan or pay them outright to have a lower mortgage? What are the pros and cons?

Thanks.