All Forum Posts by: Royce Talbo

@John Dirgo Deweese whats the reasoning for people not liking the 1056 design?  

@David L. all depends on your upkeep and if you have a lot of differed maintenance.  I dont think there is any age that a house should be torn down unless its bone are bad.  Look at the eastcoast houses that are over 100 years old, lots of them are still going strong.  Its easier to do repairs along the way than to do it all one time.  If you have lots of differed maint. then that bill will hit you all one time and then it might be cheaper to just tear down and rebuild, but if you upkeep along the way it is easier on the wallet.  That is why you have depreciation and reserves to deal with these repairs when it comes due.

@Fiora P. Im going to go against the grain here.  You said that you bough the house in 2008, did you ever refi and can you afford it?  Im not sure how your local market is, but if it was me I would find a balance of investing and living.  I would put that $50K into the kitchen and addition as that would add value to the house like you said.  If you have a good market and get back all of the $50k or more in equity, refinance to take it out.  If you never refinanced the mortgage payments might be cheaper, you end up with a new kitchen, and you have the money to still go out and purchase another property.  Even if you have to pay couple hundred more in mortgage payments, if you find something that will cashflow at least that much you are no longer paying that extra payment.  Eventually you would have used that cashflow to redo your kitchen anyways, so why not do it sooner and enjoy it.  Many investors get too caught up in acquiring more and more properties that they forget to enjoy life.  If something happens to them they just wasted their life acquiring all these properties and not enough time enjoying what they really wanted, a nice comfortable life to live.  Some people have goals to have over 100 properties, but to me that is too much work.  The goal is to find passive income where you dont have to worry about so much vacancies, tenant complaints, repairs etc., you just sit back and collect some checks every month.   So research all your options first and find a balance between investing and what makes you happy. Good luck!

I saw this last night too! This guy is something else to do this to his own family.  He keeps trying to defend himself on FB saying that he is helping them by keeping the banks from foreclosing on the property.  This guy is an idiot he is a real estate agent and he just ruined his rep and his career no-one is going to trust him now.  

@David L. Im sorry I thought you were on Oahu, Kauai is a different county and has different tax rates and different rules.  But as far as Res A (which I dont think Kauai has) it is for non owner occupants that have an assessed value over $1M pay a higher tax rate.

Since you are in a designated visitor area do you really need an ADU? Could you just build a rec room with a separate entrance, throw in a bathroom and rent it out like a hotel room? If you looking for longer term rentals like monthly then maybe throw in a wetbar too.

@David L. You still need to do a lot more research before you do anything. You will only be granted an ADU if you are living there (have a home exemption) and have a minimum 6 month rental lease. If not it is illegal, so no vacation rentals are allowed. If you are building a duplex or CPRing the property that is different from a ADU. ADU are restricted on the size it can be depending on zoning. If you go this route you will be able to do a vacation rental, but you will have to pay regular taxes, hotel taxes, and because you stated the property would cost $1.2M market value will most likely be over a $1m putting you in a Res A tax bracket for property tax (about double the regular rate), unless this is in a commercial zoning. Also when you say kitchen, a kitchen is a place where you can heat, cool/store, and clean/rinse. A wetbar is any of those 2, so there is a minimal difference in size. What many people do is get around having 2 kitchens by having a wetbar with a sink and fridge then after inspection passes give the tenants a stove top or hot plate. Essentially it is an illegal rental but the structure is legal so you wont have any resale problems.

Hope this helps you in the right direction so you dont waste your time and money on something that you thought was possible but ends up not.

@Manly Souza I think he meant he no longer has them (either through them out or lost them) since it has been about 20 years ago, instead of being an illegal structure.  
@Nate Lee I would either call department of planning and permitting or check the property tax website.  If the site goes back that far maybe you can just see the difference in price from when it was one house to the next year when it has 2 houses.  Ask your accountant if that will work, hopefully that will save you some money.  If not then you will probably have to pay for an appraisal. I know this didn't answer your question on if there is another way, but hope this helps.

@Michael Swan Wow this is probably the best success story I have read.  Something that I was wondering though, maybe I missed it.  How much did you start off with? I saw you said you put $6000/year away and you put about $25-30k down each time.  How much did you buy in your first year?  After that I'm guessing you refi cashed out and used that plus cash flow to purchase the other properties the next couple years or did you go straight to 1031's?

@Margaret Martindale we used patterned shelf liners for the back and sides of the cabinets and plain white for the bottoms its looks really nice. Kinda looks like this

@David Hodge One thing you might have left out is, is this an arms length transaction or was there something wrong with it, like foreclosure, short sale, off market etc.  If so then your property cant be used as a comp and they will just use other sales comps and make adjustments to come up with your property value.  If it is a a good sale then they can use it as a comp and it will be the best comp, might not bring it down to the price you bought it for because of the other comps that are used, but it should help.  Like others said above every state is different, if you are contesting for last years value then you have to do some research and if that can even be done.  If you are contesting for this years value then find out when their cut off date is for assessments so you can find the right comps.  Basically they are valuing your property on what fair market thinks its worth not what you pay for it.