All Forum Posts by: Tim P.

I feel like these type of deals overlook the value of your time time and energy.  $2,400 per year cash-flow... it's so little... even if you bought 20 of these you'd be at $48,000/year... just doesn't seem worth it.  Duplexes are not passive income, and one major repair will eat your entire year's cashflow.  More money would come from a raise at work or bartending on the weekends.  I don't mean to be cynical, if you love real estate, I'd just suggest you chase higher $$$ properties so that you get rewarded for your efforts.

Every time I hire a contractor I am faced with either A) an absolutely absurd estimate, that I can't even consider paying (e.g. $25k to replace a basic wood deck) or B) sloppy work where I have to babysit or fire the contractor and redo the work myself.  How do you guys manage it?!?

Don't overthink this.  You ask for additional credit for work you "didn't anticipate".  Send a list of issues and ask for the full amount of $$$.  Hopefully the seller agrees to give you something.  If they refuse, then you decide if the deal is still worth it or not.  I would not ask the seller to pay towards your loan costs... that has nothing to do with them.

$10k/year return on $400k equity is absolutely terrible. If you find a multi-family with 10% cash-on-cash return,  thats $40k/year. Or you can get a 2 year bank CD with 5% guaranteed return. You sell right now you don't pay taxes on the gain. Thats $75k savings right there. And today houses are still fetching near-covid pricing despite soaring rates. Selling is an absolute no-brainer to me, and I am surprised by some of these responses.  Losing the low interest rate is the only drawback, but I think the tax-free gain more than makes up for that.

I am looking at an old house that strangely has an unfinished basement, then a crawl space above it with joists/subfloor, and then the first floor's joists/subfloor above that.  2 layers of unfinished space below the first floor.  Has anyone ever seen this before, and what is the purpose?  Most of the plumbing is located in the crawl space section, not the basement.

(P.S. sorry if this is the wrong forum, I couldn't find a "construction" or "home inspection" forum.)

I'm not a tax expert or accountant, but I believe all expenses while the property is vacant/not rented are basically considered capital improvements and added to the cost basis of the house.  So my guess is that you can take "Depreciation" on the cost basis of the house (purchase price + qualified closing costs + qualified expenses), but not deduct any expenses for 2016.  Once you rent it in 2017, the expenses after it is rented can be deducted for 2017 taxes.

The tax rules related to rental properties are pretty confusing and surprising at first, you should definitely spend time reading about them and learning as much as possible, whether you decide to use an accountant or not.

Property:  3BR single family house with a separate 2-car garage + 2BR apartment above.  2 separate buildings only a few feet apart on 1 land parcel.

I am buying this property as an investment with 25% down payment and don't expect to have any problems. However when I sell in the future, can this setup (2 buildings on 1 lot) present a problem for a buyer who will be an occupant of only 1 building and who will be putting down small down payment with FHA loan?

Thank you!

Hi, I am trying to get conventional bank financing for a 2-family investment property (NOT primary residence). I met with a local bank and am pre-approved. However I am finding that the good deals (foreclosures, estate sales, etc.) need obvious repairs - which will interfere with conventional financing. But a construction loan is too stringent/complicated and 203k rehab loan doesn't apply. So I feel stuck... I am over-qualified for the purchase price and have the cash for the 25% down payment plus the renovations.

Does anyone have experience working with local banks in this situation to get the conventional financing approved, despite necessary repairs? Has anyone put money in escrow to accomplish this task - or any other tactics? Thanks for any tips!