All Forum Posts by: Scott McMillan

A man of few words... and no picture

@Peter Lampione 

http://www.lireia.com/

yours?

Hey Peter! Good luck! Did you got to the REI in Melville?

Wow what a nightmare, I would probably walk away from the deal, do you have a non refundable deposit you would lose?  The seller seems like he is hiding something, I wouldn't move forward without walking through the entire place.

If you walk away and it stays on the market you could also then submit a lower offer.

I'm not sure when you bought your property and if you have a copy of the appraisal from the closing process, if you do it should list the land value separate from the total appraisal value.  If not look at the tax assessment records from the year you purchased the property it will list land separate from improvements.

Depreciation is [Purchase Price + Some closing costs (Fee's and such but not any prepaid expenses)] - Land Value  / 27.5.

I disagree with Jerry, on a home valued only around $130,000, $200 doesn't seem to bad per month. That being said using a simple excel amortization calculator I came up with the following scenarios.

If you solely refinance your current $85,000 loan into a 30yr loan, 3.75% interest rate, $1500 closing cost estimate.  $86,500 at 3.75% for 30yrs is about $400 P&I payment, leaving plenty of money left for cash flow.

Now if you want a cash out refi at 80% LTV, that would give you immediate cash to replace the roof (which would either be considered a repair (an expense) or replacement(depreciated)). Any money left over could be used to invest in another property. $104,000 at 3.75% for 30 years is about $480mo P&I. Again leaving you plenty of room for cash flow.

In my opinion cash flow is most important.  Amortization is great, and appreciation a bonus, but cash flow is the most important while depreciation helps keep your taxes low.

You definitely do not pay taxes based on gross income.  You can also write off Mortgage Interest Payments, Property Taxes, Insurance, Utilities, Accounting expenses, travel expenses, and repairs.  Depreciation is 27.5 years. How did you arrive at your depreciation basis?  $51,000 seems pretty high land value, does your property tax bill list land value?

Why do you say you pay taxes on the $1,400?  You don't sound like you are cash flowing on the property and I would assume depreciation would wipe out the remaining taxes.  You refinance into a 30 year loan, possibly pull some additional cash out and your cash flow would improve with the lower payment.

Jonathan our local REIA is called LIREIA. Meets second Tuesday of the month at the Melville Hilton.

http://www.lireia.com/

Good luck!

@Steven Torres  No I have not done any Long Island deals and don't see myself doing many due to the high prices and taxes.  I am looking to invest in Buy and Rent properties out of state.

Will the calculators ever be available on the apps?