All Forum Posts by: Tommy F.

1. Question is, do "you" want the basement finished do "you" want to pay for it? If not, move on to next applicant. 2. I read posts about advance rent and all the hypothetical nightmares and I don't agree. Of course, anything is possible, but these type comments remind me of all the naysayers to REI and the broken toilets, late night calls etc. People have any number of reasons to pay advance rent. I've known people to allow higher taxes to be deducted from W2 income so they can get a refund the following year as a way to force saving. Insane! But people do it. Same with advance rent. If screening comes up clean, go for it. BTW, I've taken in the past and did recently take advance rent and have no problems with it. 3. If you take advance rent, you must record the income in the year you receive it. It is constructive receipt. Individuals and many small businesses have cash basis accounting, not accrual. If you get 12 months of rent on 8/1/16, that money is 2016 income, but you won't have but 5 months of expense. Do the math and visit a CPA. Good luck!

Additions and improvements such as a new roof have the same recovery period (depreciation years) as that of the property to which the addition or improvement is made. For residential property, that's 27.5 years and the roof will be a separate depreciable asset. It's depreciation begins when it is placed into service. Go to irs.gov and search "Depreciation of Rental Property"

Read the book: 401(k)aos by Andy Tanner. It will give you a totally different perspective. Read TIME magazine Oct 19, 2009 "Why it's time to retire the 401(k)". Consider a Golden Goose that lays eggs forever (real estate), tax-free and/or tax-deferred forever OR a Golden Egg (401k) that is taxed at ordinary tax rates, is subject to volatility, has a "required" mimimum distribution (ask someone in their 70s-80s how that worked out during the lost decade), offers you very little control, limited investment options, etc. Yes, you can typically borrow 50% of your vested 401k balance up to $50k max and use it to invest in RE, but do the math. How long will that take you? Me? I have both, but hindsight is 20/20. If I had known more in my 20s of what I know today. Find a good RE mentor and you can crush it.

John Hopefully you had a chance to listen to the podcast episode about paying off mortgage at Money for the Rest if Us. It takes some repeat listening to catch the lesson even get pencil and paper or MS Excel to follow his numbers to study the concept. Another learning option for you to consider, go to Youtube, search Ric Edelman 11 reasons to carry a big long mortgage. Good luck. Tommy

I agree with Varma and Bryan, investor psychology, risk tolerance, and what allows you to sleep at night is vitally important. What's good for me may not be good for you. I invite you listen to an episode of Money for the Rest of Us - episode 44 "Should you pay off your mortgage?" It takes 5 minutes or so to get into the meat of it. It may be 30-40 min in total. Listen a few times at the example.

Sorry, Russell Gray, not Robert.

"Your home is not an asset". - RichDad PoorDad, Unfair Advantage, etc, etc. If you haven't read any Robert Kiyosaki or it's been a long time then re-read. If you have $600k in equity, you should get it working for you in cashflowing properties. As often said by financial strategist, Robert Gray, "Do the math and the math will tell you what to do." All the best!

Ryan Your dad can give you $14k per year and there are no taxes for either party. In fact, anyone can give you up to $14k per year. So you have $20k in debt. If your dad is willing to give $14k and arrange for someone else to give you $6k, you're good. However, your loan underwriter "may" want an affidavit from you stating how the loan was magically paid-off especially when your bank statement shows $20k arriving and departing. Just my two cents. All the best! Tommy

Thank you

If I accept money today, one time cash payment, from a tenant as an option for that tenant to purchase a house from me at some future date, does accepting the option payment jeopardize my ability to sell the house to the tenant using a 1031 Exchange? Does accepting the option money jeopardize my use of 1031 Exchange with any party?