All Forum Posts by: Shelby Ek

@Jantsen Locke I was in the same situation with a tenant and a roommate. I used quickbooks to track everything a set up classes to track everything by unit.

All income or expenses were tracked and associated with a class.

So I would have the following classes set up and to make it simple lets say each apartment is the same size and you are sharing your apartment 50/50 with your roommate.  Your percentages may be different, but this will keep my example simple.

Apt 1 rental - 100% of expenses are a write off

Apt 2 owner occupied- 50% of these expenses are a write off, because half is a "rental/roommate"

Whole House- 75% of these expenses are a write off because you are only owner occupying 25% (so things like repair to common area, landlord electric meter, etc.)

At tax time I print a P&L by class and give that to my accountant.

I'm not an accountant and not giving any professional tax advice, but this system while a little work upfront, keeps things really easy and is a system thats worked for me.

I love this idea for a post and enjoyed reading everyone else's posts.

I bought a 2-unit at age 22 in 2006, in Allentown, PA.  I didn't know much of anything just that I had read Rich Dad Poor Dad and didn't want to make anyone else rich with my rent money.  I bought at the height for $135k and got a no doc mortgage (no income verification lol) put 5% down and used seller assist, so was able to buy with about 7k in cash I had saved.

One unit was vacant, which I moved into and got a roommate. The other unit was occupied by a long term tenant (who ended up staying another 10 years).  My tenant and roommate covered more that my mortgage payment.  I was kinda double house hacking lol, but that term didn't exist yet.

Of course soon after the market crashed, and I couldn't refi as my property was now appraising at half of what I bought it for and I no longer could qualify for a loan.  It was quite disappointing but mortgage was covered by rents and I had a nice place to live so I stuck with it.  10+ years later it did finally appraise for well over what I bought it for and I was able to pull some cash out of it.  We recently purchased another 2-unit and moved into it.  So now my first is fully rented and cash flows nearly 500/mo.

For a while I thought I had made a terrible error buying it,  but now it's a great cash flowing property and I'm able to leverage it to make other purchases.  I figure no matter what it was certainly better than paying rent to someone else all those years.

I doesn't really matter if you use a separate account or not. Your DTI is your DTI. Lenders and the IRS are looking at the big picture not just what you have in your "business" account should you set one up. It would really just be to help you keep all expenses under one account.

I have for years lived in a house hack.  I do have a separate account for all house related expenses.

What you really need to do is track everything for your accountant.  I'm not sure how it works when you are renting out bedrooms, you would have to ask your accountant. 

I use quickbooks (but you could use excel) and track all my income and expenses relating to the house.  I have it set up as classes in QB, one for the whole house, one for the rental portion, and one for the owner occupied portion.

I am using 50% of the house for personal use, so my accountant can deduct 50% of my "whole house" expenses, things like taxes, the water bill, mortgage interest.  Repairs or maintenance or costs relating to the rental portion can be deducted 100%.  and of course the costs relating to my personal portion are not deductions.  Make sense?

Hi @Justin Brown will there be a meeting February 21st?  I've mentioned it to a few investors and I want to make sure it's happening. 6:30?

I'm house hacking a 2-unit that has electric baseboard heat.  Its new to me.  My last house hack was gas and I paid heat and hot water for both units (totaling about $1200-1500/year). My rents are higher in those unit because the heat and hot water is included.  My new place with baseboard (and hot water) electric has been almost $300/month since we hit winter.  And it's not even very warm in our place.  As I do renovations to it I am trying to make sure I insulate as much as possible, even though I won't be paying the heat bill, I imagine it will affect me when my tenant gets a huge bill and then can't pay the rent because of it. They do struggle to keep up when the temps really drop.  I plan on sharing what my past electric bills were for the tenant when I go to rent it.  I'd rather them have all the info up front and be able to plan for winter electric bill.

I was able to get a LOC on a property I purchased just a few months earlier. I made sure to give my lender my new leases so they could use that income to qualify me. My taxes did not yet have that income accounted for.

Like others have said try a different lender.  Ask them right away if they will be willing to use that rental income to qualify you.

I would NOT do this... Especially now that you posted on a public forum about it. If you really want this you will have to make some sacrifices...like moving. You could even rent out the home you own at the same time you will speed up your process by doing it this way and you won't be worried about going to jail. It's like a triple win!

How far away is your DTI vs what they wanna see? They should be able to tell you exactly how much debt you need to pay off the qualify. Are they taking the rental amount into consideration in your income? You may need to wait a bit and pay down some debt.

You will probably be fine as they will ask for pay stubs from your current job to see what your income is. Also if you are buying a multi unit that is currently rented they will likely take some of that income into consideration when qualifying you. Really the only way to know is to talk to a lender and get pre-qualified. You will then know exactly what you can qualify to purchase.

I used real estate express online. I liked it and passed my state exam in one shot with flying colors! Feel free to PM me for more info and we can chat a little more about it.