All Forum Posts by: Daria B.

Sure thing @Al Brennanglad I could help.

Hey @Matt Devincenzois there a certain amount to time that would have elapsed for the gov (IRS) to view the "flip" as not a "flip" and impose capital gains? Say for instance, one purchased a property (not like what Al wants to do) with the intent to flip it but for what ever reason, they still had it for 2 months then turned it into a rental that rented for 6mo or a yr, then were able to sell it afterward. I don't know if that's a good example, basically I'm wondering when a "flip" is not considered for "earned income" but rather "capital gains" or does it only matter with respect to how long the property is held.

"A flip or a spec build will be taxed at your normal income tax rate, it's not a capital gains taxable sale. It will be treated as a business or earned income, not passive investment income."

LOL @Buck Savage

 That is funny, a very small world. Looks like you picked a go-to guy right off the bat. Good job!

So are you flipping this property? When you do decide and if the GC does a great job you will have gained a resource. Although I don't do flips, a good GC is a good GC so if the works out and I need a GC in the future, I'll knock on your door. :)

Good luck!

Yes, @John Leavelleit is to buy-n-hold and this is not the one for sure. I couldn't even find the other duplex so the Ad didn't match the appraisers office. Not sure what's going on but it doesn't matter now.

News Alert-I called the tax office and found out the taxes have not been paid in over 2 years and there are tax certificates on it.

I may have to look at *taxes* as my line of sight to do the elimination round early.

LOL Yeah @Brent Coombsis that hilarious or what. When I looked at the initial purchase, even over looking the fact that these are not appreciated at half what it was purchases as, I thought this person has "got" to be on drugs. @James DeRoestit's purely for cash flow for me and if I can get a duplex or quad low enough, I might be able to sell for a small enough appreciative :) value. I have other properties that are my appreciation holds that do cash flow well. 

Lesson learned, look at the taxes to make sure they are not delinquent. All I did was look to see what the number was for the last year and moved on without considering actually looking at the bill. :/

And get this, not long after I found those duplexes, another popped up and they want $525 all purchased for the same amount in 2005. Honestly, what's going on here? They pay that price and 10 years later they want to sell at the same price?

welcome @Al Brennan.

Property tax is based on the assessors value they place on the property. Mileage is the same for everyone whether owner-live in or investment and owner does not live in. 

If you live in the property then you get to homestead which reduces an amount from the assessed value, thereby, reducing your tax payment. They deduct any homestead amounts from the accessed value. Ie assessed is $100k and your homestead is $25k so your base for which taxes will be on is $75k.

I'm not sure how long and when you apply for homestead when that kicks in. You can call the appraisers office in the area you are looking at buying. They are a wealth of information.

@Kyle Scholnickin my experience with my own purchases, I have never seen this done. I ask a lot of questions and present everything to my CPA (versed in real estate taxes and investments). I have also read through a lot of IRS documents on deductions (allowable/not allowable) and have never seen that as a valid deduction.

You may want to consult a tax advisor on this topic. There may be some in the forum that can definitively state whether this is something that can be done.

It would be nice :)

Hi-

This thread isn't too old so I'm  hoping you are still out there.

I went away and did some thinking and more reading and looking at my next investment. I think this question still ties in with the original posting. :)

I'm looking at getting a duplex to get me into the multi-family units, starting small then hopefully growing to more units.

I found an investor who is selling all of his units (5 duplexes but will sell 2 of the duplexes if someone just wants 2). Although I'm looking for just 1 duplex, I think 2 would still be low enough to handle. It gives me 4 rentals instead of 2 but it's still a low number to manage.

With the 2 mortgages I have now, if I just get the 1 duplex, that will be #3 with 1 remaining mortgage.

I'm not sure if flipping back and forth from conventional lending to portfolio lending is done until the max #4 mortgages is exceeded.

1-Is it  possible to buy a quad (2 separate duplexes) and have that as one mortgage in the Fannie world? 

2-Or, would I have to go to a portfolio lender (I don't have one as of yet) in order to do a deal like this?

3-If I had to go to a portfolio lender and got #3 for the quad, will I still be able to get #4 through Fannie or am I now in the portfolio world as a result of getting the 3rd from a portfolio lender.

@Adam Johnsonas an investor you seem to be heavily into the portfolio lending and after jumping over that fence can you give some advise on your experience.

@Michael Worleyyou are a banker, is this something that you have run across.

Phew.....

Have a great weekend!

Well I've had a couple of weeks to think this over and to look at some properties and run some numbers....

I think for me it's enough just doing the due diligence with *newer* last 10 years properties rather than thinking on the list that @James Wise@Joel Owensand @Cindy D.mentioned. 

You gave me pause to think on some things that I didn't consider like pipes. Amazing when I take off the hat as living in my own home to that of an investor needing to look at the same things that I don't see the same things. :| I had my own home re-piped. The water flow was horrible and heaven forbid doing laundry and taking a shower at the same time.

Thanks....and have marvelous weekend!

@Buck Savagethis is the response from my agent.

According to the expert in town on FHA 203K loans - there is no such requirement for FHA loans. He says there are some certifications out there but none of them are required. Did someone tell them it had to be a GC that was certified?

You can check with Ron Byrom at Univerisity Lending - No one has done more of those loans than him - Ron Byrom 850 2285125

Hi-

I'm looking for duplexes, starting small...but of course multi-multi is out there in mass. However, +5 units do come with more things that I need to learn about before just jumping in.

What I'm running across are for-sale owned by investors that have several duplexes.

To hone my skills, I am doing analysis from what I learned about deal analysis, thanks BP community, to see what I come up with. And who knows, it might be a better deal instead of piece-mealing trying to buy 1 or 2 duplexes at a time.

This listing is from an investor (selling through a realtor) who owns 4 duplexes all on the same street. Built 1978 last sold 1996.

I pulled up the addresses using maps.google.com to see the area.

From the pictures, and I know it’s not the same but it’s a start, it looks decent, it's on a cul-de-sac.

I also pulled up the property records (appraisers and tax site) and found the investor purchased all the units at the same time in 1996 (built in 1978) for the same price each $40k.

I didn't bother with looking to see if the investor still has a mortgage on the units, since that $ amount and this amount of time it's likely to be paid for. And according to Trulia.com, the area is all green (good) as it relates to their crime stats.

These are all 2/2 total 1708sq ft (854 @).

Question: Can anyone speak to the history showing on-off market so erratically over the months/years? Does anyone really look at the listing history?

Also, I got this just before it was removed from Zillow.com so now it just looks like 6/1/2015 as a “new” listing.

• 06/01/2015 Relisted $565,000
• 07/02/2012 Relisted $565,000
• 06/29/2012 Delisted
• 01/03/2012 Relisted $565,000
• 01/01/2012 Delisted
• 08/02/2011 Relisted $565,000
• 07/31/2011 Delisted
• 07/08/2011 Relisted $565,000
• 06/30/2011 Delisted
• 06/28/2011 Price Changed $565,000
• 12/01/2010 Relisted $615,000
• 11/30/2010 Delisted
• 10/11/2010 Relisted $615,000
• 10/08/2010 Delisted
• 09/09/2010 Relisted $615,000
• 09/08/2010 Delisted
• 06/27/2010 Price Changed $615,000
• 04/09/2009 Listed $620,000

Question: Do I look at the duplexes as "individual" cash flow, COC, and ROI for the outcome or do I look at all of them for the potential $$$?

Question: How do I do vacancy rate on individual duplexes? I am thinking I need to do 10% on each one?

Current rents ($27300):

• Unit 2 Rent: 575 (6900)
• Unit 3 Rent: 550 (6600)
• Unit 4 Rent: 575 (6900)
• Unit 1 Rent: 575 (6900)

I know this is just information as it was provided by the investor/realtor as part of the ad and due diligence would be to see what other rents in the area go for and to get an actual "rent roll" from the seller.

Tax roll:

$1,939 for each unit according to the tax assessor site…but….I also see “unpaid” so I’m wondering what’s going on with these units.

To the analysis (without 50%):

• 10% PM
• 10% vacancy
• 5% cap ex
• $2000 taxes each unit (4 of them) (i don't know how to determine this since their taxes will differ from what the new person coming in will have to pay)
• $1000 insurance each unit (rough estimate of $1k per yr per unit)
• 10% maintenance
• 20% down with
• 4.8% rate on a 30yr. (this was based on a SFR and I couldn't get in touch with the bank to find out what multi rates were).

1. Gross: $2,275
2. Vacancy: $228
3. GOI: $2,047
4. Expenses: $1,568
5. NOI $479
6. PI:$2,393
7. Cash Flow: -$1,914
8. Cap Rate: 1%
9. COC:-17.7%
10. ROI:-30.7%
11. Rent-2-Value: 0.4%

To the analysis (with 50%):

• 10% PM
• 10% vacancy
• 5% cap ex
• 10% maintenance
• 20% down
• 4.8% rate on a 30yr. (this was based on a SFR and I couldn't get in touch with the bank to find out what multi rates were).

1. Gross: $2,275
2. Vacancy: $228
3. GOI: $2,047
4. Expenses: $1,138
5. NOI $909
6. PI:$2,393
7. Cash Flow: -$1,484
8. Cap Rate: 1.9%
9. COC:-13.7%
10. ROI:-26.8%
11. Rent-2-Value: 0.4%

This just seems horrible at $565k…

Thanks everyone….

Hey @Brian EddingsI would agree with @Nicholas Crum. If you know your market is doing well now and your 2nd reasoning, which is a good one to pay off debt and re-invest, then I would say you have a better option than waiting for them to figure out what they are doing in their divorce. Anything can happen in 6 months, even less than that time.