All Forum Posts by: Tina Tsysh

Usually any boot is reported on line 15 of Form 8824 Like-Kind Exchanges and is taxed at your ordinary tax rates. Your money that you "put into" the property is going to be accounted for in the "re-sale" price, thus your boot is most likely going to be taxed as ordinary income. Definitely talk to a CPA tho! 

I would approach this situation in a calm and respectful manner. Let the tenant know how you got to your number ($9 / year / lightbulb). If your tenant is demanding $70 / month, I would ask how he / she is getting to that number. As long as you are respectful and understanding, everything should work out! 

Every SFH and homes with 4 units or less are appraised based on the comps in the area aka what similar homes in the area have sold for. You can look at recently sold homes on realtor.com to get a better understanding of market values in your area.

Multifamily homes that have more than 4 units are usually appraised based on a cap rate, which is NOI divided by a cap rate. Cap rates vary by markets and if you want to know what cap rate a certain apartment building has, you should reach out to commercial brokers in your area.

Estimating rehab costs by J Scott is a great start! He breaks down all of the major rehab components and their cost estimates. I definitely recommend reading that book. 

It depends on your experience and the scope of the work in the house. Have you ever done a flip yourself or this going to be your first time? In addition, is this going to be a light rehab or is it going to require a lot more work than just replacing carpets, painting walls, etc?

Congratulations on starting your real estate journey! 

I would have to agree with @Ian I Leinwand and say that it all depends on your goals. But, the general advice is that you want to keep all of your deals (unless they are a disaster) and utilize the equity that you have built as your leverage on your next purchases. That's how the wealthiest people in real estate build their empires and leave legacies behind. 

Instead of selling your homes (unless exchanging for a bigger multifamily and absolutely have to sell), you want to keep the properties that you already have, let them cash flow, and utilize the equity from those homes as your down payment on your next purchases. It will pay off 100 times in the future! 

You can do it based on the square footage of units. Let's say 1 unit is 800 SF and the 2nd unit is 1200 SF. The first unit should pay 40% of the water bill (800/2000) whereas the second unit pays the remaining 60%. 

You can also do it based on the number of people that live in each unit (if more people live in the bigger unit). 

There are a few ways to buy a property with no money down:

1. Buy a property using a VA loan. You can buy a home with 0% down but only veterans can qualify for this loan.

2. Sometimes lenders will give you a mortgage based on an appraised value rather than the purchase price. Let's say you buy a home for $100k, but the appraisal comes in at $120k. Let's say you want to use 90% leverage on this property. The lender may give you a loan based on $120k instead of the $100k purchase price. This way, you will receive a mortgage for $109k (90% of $120k) and instead of having to put the other 10% down, the lender will use your equity in the home as a down payment. You are basically acquiring a home and paying below market price, meaning that you are instantly getting $20k in equity. 

3. Partnerships. Get a partner to go in on a deal with you. However, remember - if you are not providing money, you have to provide either experience or knowledge to the table.

Hope this helps! I also recommend reading Brandon Turner's book on investing in real estate with no money down. 

I believe that consideration is needed (can be as little as $1). I would go to an attorney who specializes in estate planning to draft a correct life estate deed. There are multiple pros and cons so make sure to do your due diligence prior entering into a life estate deed! 

You need to serve your tenant with a notice to pay or quit (I found a good example for Tennessee here). The document will state that they will have to pay the entire amount owed or vacate the premises in 14 days. So if the tenant pays you $100, it won't satisfy the requirement since you are asking to pay the entire amount owed. 

You can find some real estate agents in your market here on BP. Message them and ask what kind of clients they work with, do they have a minimum deal price, their experience etc. You have the right to interview agents - don't just go with the first person you meet. You want to set your expectations from the beginning so that there are no conflicts later. Agents want to have a good relationship with their clients as well, so they understand that some clients are a fit for them and some aren't. It's good to figure out if you two are a fit early on before signing any contracts rather than finding out you don't like working with each other in the middle of a transaction.