All Forum Posts by: Scott Schultz

I would suggest bring  contractor to look it over if you dont know construction costs, I have learned over the years what it will take, and can walk through and know pretty close what the rehab will cost, but that has taken a lot of deals to learn, so if you dont know get an expert. also consider your timeline, and current market conditions, I dont want to be negative, but at least my area, i think we are closing in on the peak,  prepare for falling prices in the semi near future. 

also consider the added mess from fruit trees, as well as the things they attract, for example in WI fruit not picked that starts to break down or drops and left to lay attract yellow jackets and other stinging bugs as well as the hazard of falling fruit, and staining concrete depending where they are.  not a bad consideration though. 

if the current tenants are month to month either party may terminate tenancy without cause with proper notice

 At what income would the effective tax rate be 44%? you know to hit the 28% bracket that rate is only on dollars $91,900-$191,650, so to pay 28% straight line you would be north of $500K/ year income, like most other countries we have a tiered system. we are all taxed the same on the dollars in that bracket, and it increases only on the dollars in the brackets above.

Property tax credit would only apply to non business properties, property taxes are a business expense for rentals, the  elimination of the mortgage interest deduction only would apply  to new mortgages over $500K  I really like the 12% for the first $90K as a married couple. I dont like the change for cap gains on "live in" Flips though, going to 5 of 8 years vs the current 2 of 5

we run winter move in specials with reduced rate till March or April, (lease at the reduced rate till spring) this then keeps the 1 year lease coming due each spring when it is easier to get a tenant.

is the drawing needed to be approved in your municipality? any competent carpenter can figure what is needed for a header for a Load Bearing wall.  I  do understand having multiple contractors on one house, generally that doesnt go well.  

I would guess you could hire a structural engineer and get prints for around $700-$1000, his fee is quite high in my opinion.   

have you looked at the flood maps in the GIS? also pay the $10-15 to have your banker pull a flood cert. the question should be if you or a future buyer would need flood insurance for a mortgage. remember if you need flood insurance and its not owner occupied, (I.E. rental property)  when the flood insurance program transition completes the re will be zero subsidy for non owner occupied, so you will pay full risk, that $800/year people pay today will be going to $2500-$4K/year. huge affect on cashflow and resellability. 

how would the second lender know? you are bringing cash (via wire or cashiers check) to closing for your 20% and the HELOC is secured against the other property, so who cares, unless you are doing secondary market, then they want that money "seasoned" but who buys in their personal name anyway.

@Matthew Srnka if you dont find a buyer will you close? if not your offer could be viewed as fraudulent, as far as "wholesale value" you have a contract below that, so what is that value, that could be up to a court to decide, plenty of people sell paper, and some get screwed, all I'm saying is Nut Up and buy the property, add value and resell, then you are safe, if you cant buy the property, you shouldnt be offering on it.