All Forum Posts by: J Zev J.

@Patrick Gill

260K all-in

11,500 cash

248,500 original loans

ARV = 300K

Refi out 240K

Pay off 240K in original loans

You'll be left with no cash and 8,500 in original loans and 240K in new loan so total of 248.5K in loans

This doesn't take into account any closing costs, loan costs, interest, etc (and possibly and probably unexpected other fees and overages that you might not be expecting...) - let me know if this helps with a vote.

I'll summarize based on your numbers:

You're all-in $260K (assuming 230K cash and 30K loan - however don't forget about closing costs, loan costs etc)

The ARV is 300K

You'll have $40K equity, however, you'll probably have to leave $60K (ie 20%) in equity on the refi. So you take out $240K (from 300K ARV minus 60K (20% left in deal)) on the refi pay off the $30K loan and you're left with $210K cash. If you started with $230K cash that means you have $20K tied up in the deal and you only have $210K cash now. So if you're objective is to get all of your money out on a brrrr you'll have to find a better deal.

Hi @Dave Price - The rules are nuanced as all IRS rules are. If you check out IRS publication 535 and search it for 'start-up costs' you'll find some sections that have good information and probably answers to most of your questions (at least in the abstract). Advertising doesn't mean you're open for business...I wish it was that easy :)

@Liam OKeefe - I don't think all 'analysis paralysis' is created equal. I think you have a valid question and it's worth figuring out before making the leap. I think a good analysis will lead to a good decision. There might be other questions you could ask that will help you analyze your situation better. Some concepts to consider (in addition to cash on cash return) might be time involved, difference in appreciation, difference in tenants, difference in projected capex, difference in pm availability, etc.

Hey @Brandon N. - great job getting started with a househack. I think that's the best way to get started with investment properties. Good luck in your journey.

@Joseph Martinez  Looks like Scientists/Lab Technicians are the heaviest coffee drinkers per the National Coffee Association. Maybe everybody in real estate is really a mad scientist trying to figure stuff out. At least the flippers for sure.

@Daniel Villegas - no problem. I think you should understand the '50% rule' and the '1% (or 2%) rules'. Once you understand those that will give you easy 'ball park' numbers so you know where you should focus your time on analyzing further. But remember, they are just guides and should not be relied on for your final analysis. They're a good starting point and then you can use the calculators. 

Hi @Bryant Brislin - If you Google 'EY Airbnb' you'll be pointed to a long document from Ernest and Young (big 4 CPA firm) that tells you which expenses can be deducted in section 4. That document also gives examples that I think will enlighten your CPA about what is already included in the 1099. 

Hi @Matt Stevens - I highly recommend working with an attorney before you proceed with the partnership or JV. The attorney can answer your questions and set everything up nicely so you're protected and that you don't have unexpected headaches later down the road. Some attorneys will have free initial consultations where you can get some general guidance.

@Daniel Villegas - Have you tried the BP calculator yet? That's a great place to start. It will walk you through some of the numbers to think about.