All Forum Posts by: Ash Hegde

A cost seg will  separate personal property vs real property for tax purposes. If they identified 20% of your cost as personal property which was 100% deductible in 2022, then yes the other 80% would be deductible over future years.

In 2023, that calculation would change a bit, with your example of 20% being identified as personal property, you would get 80% of the 20% immediately (16%). You would then get the remaining 84% in future years (what's left of the personal property will depreciate faster than the real property). 

Nice job Mo! Is it renting well so far? 

An FHA loan has to be your primary for a year, so this scenario would not work.

They both sound pretty good if the numbers work. Which area and home would you rather live in?

Jeff mentioned the self sufficiency rule for FHA which could be an important consideration. The triplex will be subject to this test but the duplex will not.

There is no capital gains tax on the cash out refinance if you take more out than you spent. You aren't required to reinvest it. 

Nathan gave a great answer. Smart on your part to start off by using as many low down payment options as possible. 

For fix and flip, you're going to want a hard money lender. A traditional bank will not lend on a fix and flip property that is too distressed, though there are a couple rehab options for a primary residence if you want to go the route Karl mentioned. 

The good news with hard money lenders is they do not care about your personal income. The bad news is these loans come with higher fees and interest rates than conventional. With no flipping experience you will need 15-20% down, that can get reduced to 10% down after you have 3 flips under your belt. 

To buy and rehab a distressed property in the first steps of BRRRR you will want a hard money loan. You will get better terms with experience but they are available for first timers as well, everyone starts somewhere. These loans are based on the purchase price, rehab costs, and after repair value of the property so there is not a pre-approval process in the same sense of a conventional loan that looks at your personal documented income.

Getting your credit score up and saving up as much as you can for a down payment and reserves are a great way to start. The other piece of the puzzle for an FHA loan would be income, so if you have an opportunity for promotion or higher paying job, it will help you qualify (for this and future properties). Welcome to the community!

Both have their good and bad neighborhoods, but I think they are worth scouting out. Do you have an agent or plan to get one? They would be your best resource for navigating the nicest STR areas.