All Forum Posts by: Justin C.

 Hi Todd, I am going through this exact same situation.  Would you mind updating this post on what you did?

Thanks in advance

Hi BP,  I have 2 rentals that were acquired over the last 6 months... Property #1 closed Dec 2014 and was officially on the market May 1st 2015.  My tenant just moved in.  Property #2 closed mid Feb 2015 and should be on the market Aug 1 2015.  Both have gone through extensive renovations.  My questions are regarding classification of expenses.  I know I need a CPA... its on my list.

Schedule E has a list of expenses... Advertising, cleaning and maint, insurance, legal, repairs, supplies, etc... 

1) Because property #1 wasn't "on market" during the renovation, does everything apply to the basis?  We replaced hot water tank, walls, doors, vanities, fixtures, etc... 

1b) Do I need to break down my pre-market expenses into the Schedule E categories or can I leave them in bulk under "supplies" and "services" like I currently have them?

2) Now that its "on market" I will start detailing my expenses per the Schedule E categories.  If I go to Home Depot and spend $500 on a new bathtub, a door, paper-towels, a new screwdriver set, windex, and valve stems for a faucet; would I break these down into supplies, cleaning and maintenance, and repair with separate entries?

I am using a simple excel spreadsheet that mimics the Schedule E.

Hope this makes sense.  I'm just trying to get my paperwork organized.  

Thanks in advance

I just checked it out on zillow and yes, the 80k zestimate is WAY off.  Recent sales are all over the board from the 20s up to the 50s and 60s.  Depending on how much work 442 needs, you still could have a good deal.  

NOW, this being said, I also checked out the rentals and it seems they are going for $1k on average.  If you could get this house for $27k and even if you put $20k into it, at $1k monthly rent, those numbers are very very impressive.  I have no idea of the neighborhood or if $1k is even a reality, but if so, I would also encourage you to consider a buy and hold strategy.  

good luck dude

...

Call your realtor and ask. You don't need to know repair costs. ARV = Market Rate. Keep it simple. I will encourage you though to subtract 10% of what your realtor says. My experience has been they are generally on the WAY too optimistic side. This is where developing a good realtor relationship comes into play. You start to eliminate all the BS and get to know each other and what your goals together are. If you are flipping and have a good realtor, you may want to get to the point where you can ask them to reduce your commissions if you use them for both the buy and resell. Relationships.

yes, Marcia is right.  In PA you need a witness to hand serve someone.

Originally posted by @Colleen F.:

I had the tenants make a choice.  Most  sent up ACH to my account, I raised their rent and gave a discount to make up for the fact that some of their banks charged (this is at lease turnover). The ACH actually puts their names in my account which is a nice thing so I can see who paid when.

Hi Colleen, any issue with giving tenants your account number?  I can't get over that aspect of it... I just accept a business check sent to my po box from their online bill pay service.

I have in my ads and lease that we do not accept personal checks. I was hesitant to decide what to do for online payment and simply have my tenant send a bank check to my po box. Its all done through their banks bill pay service. Its free, no account numbers are revealed, and i can do mobile deposit with availability same day. Ultimately i like the free part : )

 Yup, great suggestion, thank you!

3 bedroom and 1.5 bathroom in B grade working class neighborhood.  All outlets, switches, and light fixtures will be replaced.  Is there anything else that I should be considering like stair tread lighting or hallway night lighting or LED ceiling fixtures in the kitchen or bathroom?  Just looking for some good Wow factors as long as we're rewiring anyway.  Most of the walls and ceilings are open and accessible at this point so our options are pretty much open.   

thanks in advance!