All Forum Posts by: Sean Britt

I’ve posted in the past looking for this, but wanted to check again since the lending landscape has changed so much in the last 2 years. 

I have two investment properties with a fair amount of equity. They are both in Denton county. I have two primary loans on them and am not interested in giving up the terms of the mortgages. Looking for a lender that will give me a LOC in 2nd position and be comfortable with me not immediately using the capital (or longer).

Are there any banks that anyone has done this with in Texas who is fine being in 2nd position? (Already have a HELOC with primary.)

Anyone see this massive increase in values this year? A little questionable considering 2022 was a fairly flat year with property sales, at least near me. Went with Ray-Tax last year to try and protest my primary, which was a huge mistake as they did nothing and claimed they couldn't lower it (didn't even have a hearing). 

Any ideas on how to handle these huge increase this year? 

 Could you DM me. I am in the DFW area. Curious if they would lend here. 

 Do you know of any in Texas? I am looking for this very thing. 

about 700k total market value between the 2, ~420k equity after first liens, and ~270k equity up to 80% CLTV.

Looking to see if anyone knows of any banks that will do a portfolio loan of 1 or 2 rental properties and take 2nd lien position (not interested in refinancing 1st position). 

I am looking at potentially moving into a property that is currently a rental and refinancing the first lien with a HELOC. This would give me a LOC against the property, drop the rate below the current rate, and do so with no closing costs. What are the downsides of this, other than the variable rate (which I feel worst case I can then refinance into a fixed if need be)

I am in Texas if that helps/matters. I don't know of any lenders (not sure if PenFed does it in Texas or not, for non-owner occupied) that will do HELOCS for non-owner occupied so I will be moving into the property for the time being. 

Thoughts? 

Thanks everyone, so my understanding now is that my tax basis and depreciation amounts are going to be separate.

There was a new roof put on in 2017, before I bought the property. 

That roof is considered part of the purchase price and property basis when I bought it so there is no depreciation it is essentially included in the property amount correct? 

Lets say my Property basis for depreciation is 150k, i take my 5454.54 depreciation deduction and then year 2, i install the new HVAC system for 10k. This 10k will be on a separate depreciation schedule independent of the property itself? 

Then it looks like I just need to pay attention to what the recovery period is for what is being done? It looks like a fridge would be 5 years. Pub 527 shows carpets at 5 years also, would this be the same if I did hardwood or laminate flooring? 

I am trying to absorb all of pub 527, does anyone have any recommendations of areas I should pay special attention to inside? 

I am trying to understand how depreciation is calculated with respect to improvements. 

Please correct me if I am wrong, but my understanding is lets say I have a property I purchased at 200k. Lets say 50k is the value of the land and 150k is the property. My basis is 150k. I can take the depreciation of this over the next 27.5 years.

Lets say I have spent 10k on a new HVAC and fixtures in year 1. This would jump my basis up to 160k.

Do I depreciate based off 150k first and then add the 10k to the new basis? Or do I take my depreciation based off the 160k?

150k/27.5 = 5454.54 

150k - 5454.54 (write this off) = 144546.46 + 10,000 = 154546 new basis 

OR

160k/27.5 = 5818

160k - 5818 (write this off) = 154182 new basis

The numbers are close, but I wanted to know if I was even in the ballpark of being correct on how this is handled and then wanted to know if there is a certain order of how the basis must be categorized, such as improvements at the end or beginning of the year.

Thanks for your help BP.