All Forum Posts by: Stephen Lynch

Perfect. Exactly what I needed. Thank you. @Natalie Kolodij

@Basit Siddiqi for tax purposes will my basis be two separate items? The original purchase price of the home + individual rehab items (some with different depreciation schedules)? Or is it just simple purchase price + rehab - land / 27.5 = new basis?

Appreciate it! 

No offense taken, I do understand the difference between them but I agree it's more challenging to understand when & where.

Gotcha, so basically the asset stays the same, but I can either depreciate and/or deduct the rehab costs. I don't have a tax advisor, maybe we could chat offline?

Hello,

I purchased a duplex in November of 2021, we've made some small repairs but it was mostly about getting the tenants out so we could start the rehab (scheduled for January). 

For 2021, I know it would be pretty easy to just do all the standard stuff for taxes (depreciate 27.5 of property, repairs, closing costs etc.).

My question is for 2022 after I do the rehab do I simply adjust the depreciation schedule based on the new appraised value, closing costs etc  over 27.5 years thereafter?

Thanks!

Agreed. I worked out a deal with an inspector to do $50 draw inspections for me. 

I found the PM through my agent. They manage a ton of properties and therefore turn a ton of properties. In this case they have a ton of great relationships with contractors who are constantly performing interior refreshes (kitchens, bathrooms, floors, paint etc.) which is usually the rehabs I’m targeting. I avoid foundation issues, mold, termites etc. until I get a little more experience  under my belt. I think it’s a win-win since they will make 10% on the rehab, I get to be more hands off and they will get to manage the property at the end of the rehab. That being said, we haven’t even started yet so I’ll report back the results. 

Thanks @Troy DeLong. Looks like I found a PM that would be willing to manage the property for a 10% mark-up on the rehab. Assuming they have access to trusted and more affordable contractors and I don't have to manage the rehab (as much) it seems like a fair trade off. 

Thanks @Mel Hayes. I’ve got an inspector who will be review all work for $50 a visit.