All Forum Posts by: Sean K.

Good afternoon, Without too long of an intro, I’ve been on the forum for a while and have been listening to the Podcasts longer. One of my best friends and I are actively looking for a 4-plex to purchase as our first deal together. We both have experience in the single family realm having bought and sold several single family houses each on our own using conventional financing. I’ve got a few questions about what we are seeking to do and hoping to get some advice. 1. What is the best way for the two of us to go on this deal together (we plan on doing the BRRRR strategy)? I’ve been getting some conflicting information about this… We would prefer to use a conventional financing (non commercial loan) to obtain the 4-plex. We are planning on putting 20-25% down (preferably 20%) with a 15yr mortgage. Someone was advising us that we should start and LLC but I am under the impression that anything bought through an LLC would exclude us from conventional financing and push us into the commercial loan zone. Basically wondering how others in similar situations (seeking conventional financing) have structured partnerships with a close friend. Should the mortgage/loan be in one persons name, both names, etc. I understand that there is typically a max number of mortgages/loans that any given person can have (around 10 per person), so would it be best to have the loan in one persons name and on the next purchase it goes in the other persons name (if so are both parties on the deed)? 2. I understand that 1-4 unit properties are considered non-commercial properties. I’ve been getting some conflicting information with regards to the Refi aspect of the BRRRR method on these 1-4 unit properties. When the time for the Refi comes around on a 1-4 unit property, I was under the impression that the appraisal is not based on how much you have increased the rent during your hold but rather just the typical appraised values of other similar properties in the area (whether it be other 1-4 unit properties or single families in the area) and that the increasing of the rents while holding the property only comes into play when the asset is a 5+ unit property - is this correct? 3. One of the 4-plexes we are looking into was last sold/bought as a 4 unit property and is currently designated/listed as a 4 unit property. We have spoken to one of the previous owners who advised that there is an unfinished upper area (somewhat described as an attic) that could potentially be turned into a 5th unit if one desired (apparently the hook-ups for water and everything needed to make it into a sep unit is there but was never done). Would we run into any potential issues if we moved on this property, bought it with conventional financing, Refi’d on it and then later turned the unfinished area into a 5th rentable unit? I know some (if not all of this) could be answered by the lender but I'm eager for a heads up prior to meeting with the lender(s). Looking forward to hearing anyone’s input, we are both eager to further our real-estate investing and glad to be here on BP!

Hello all,

Wondering if anyone can hook me up with an honest person who can repair a leak in a roof?  Could be a handyman that's got some roofing experience etc. 

Also looking to see if anyone knows someone that does bigger projects, possibly looking to add a kitchenette in the basement and some bathroom work.  

It's a townhouse in Alexandria, by the way. 

Thanks!

Do yourself a favor and check the crime stats on MPD's website, go to the crime mapping section where you can break it down by district versus looking at citywide crimes stats at a glance. Deanwood is in 6D and Congress Heights is in 7D. The city has had 35 murders so far this year, 25 east of the river, 19 in 7D. Both CH and DW should be crossed off your list without hesitation but if you absolutely had no other option I guess I'd say Deanwood, if you've got a kid make sure he/she's a black belt b4 letting them frolic at the Rec Center, unless you're cool with them coming home shoeless/coatless etc.

If you like hearing rapid gunfire, smelling weed 24/7, stolen cars flying up and down the block 24/7 and a complete feeling of lawlessness then move on in (oh the occasional naked people on PCP running around make for an interesting sight too).

Seriously, do not move to either location (especially if you have kids or plan on having any) it's not going to be the next U St / H St / Petworth blah blah for a longgggggg time, if ever.  

I just emailed my state representatives to include current and previous states to voice my opposition towards the new proposed 5/8 year primary residence cap gain tax exemption.  I'm sure they'll just delete it but it's better than doing nothing.  

Talking about the issues (pros/cons) is informative and builds knowledge but if you're opposed to certain things I would at least try to voice your concern(s) to the people who play a role in passing these bills.

I don't like the change from the 2/5 year Primary Residence Cap Gains Exemption to the 5/8 - at all.  

The first place I bought, I lived there for three years, relocated for a new job - sold it for a profit and didn't get raped (taxed). The second place I bought, I was there for almost 4 years, another non taxed profit. Third place a little over two years and another nice non taxed profit.

For the transient type who might be forced to move every few years or just wants to move to better his/her quality of life, this would be a kick in the lower extremity.

If people want to stay in the same house they've always lived in for their entire life - good for them but penalizing the people who like to move around is foul. Lets say you're living in a house for two years and some horrible neighbor moves in (from sloppy, to registered sex offender or any other type of bad neighbor you might detest) or they build a race track near your house or any other crazy unforeseeable thing - you would now have to prepare to bend over unless you want to deal with living live there another three years.

The third place I sold closed on 7/31/17.  If this new plan goes retroactively into effect for certain things, would it include being taxed on 2017 Primary Residence Cap Gains pursuant to the new 5/8 rule?  

@Lane Kawaoka

Great writeup.  Looking forward to an update if/when Trumps new tax plan gets passed.  I go against the grain (in BP school of thought) and have my deferred comp maxed, hoping if a new tax plan is passed that it doesn't lower the 401k contribution amount (which some sources are reporting will be the case).