Im fairly new to real estate and would like to pick the brains of those with more experience and who are smarter than me. I purchased my first rental back in march, a two level home built to be a duplex but is currently being rented as one unit. I paid cash for the property ($600,000) and it rents for $2600/mo.

A single mom lives there so im keeping the rent as is. Shes a great tenant and keeps the place in amazing condition but its about $400/mo below market. It would cost me less than $10,000 to add the few things it needs to be split into 2 complete units which would then cashflow $4000-4200/mo. I anticipate this conversion to happen some time next year.

Im in my thirties, I make $650-700k a year, am liquid just shy of $2m, no debt other than a mortgage on my primary home. I dont need the income from rentals at the moment so this is the reason for my questions:

Pros/cons to taking half my money back out of this current deal and using it to step into another property. I would still cashflow about $300/mo if I did so, but again im not concerned about the income more so appreciation and tax benefits.

Ideally would like to roll myself into 5-10 properties eventually but would like the opinion of other successful real estate investors and how they would proceed with the current property I have and future properties if they were sitting in my same shoes financially.

Hey guys! What are you doing to lower your income for 2024 taxes? I know capital improvements are tax deductible but would contributing to a Roth IRA? Looking for ideas

Thanks!

Hello all,

If there is a more appropriate subreddit to post this question please let me know.

My mother lives in her primary residence in Florida and owns a second property there.

She would like to sell that second property and is looking for ways to avoid paying capital gains tax on the sale.

While researching I discovered the 1031 Exchange, which seems to offer a way to sell that property and avoid capital gains tax as long as she immediatley (within 180 days) purchases an additional "like kind" investment property.

I live in up-state New York and if this process works, she is considering purchasing that "like kind" property near me and possibly end up renting the property to me.

I have a primary question about the "like kind" definition specifically and would be interested in any additional feedback anyone has about this potential plan.

1. What are the exact specifications of a "like kind" property?

For example, if she clears $400,000 on the sale of the existing investment property, how close to that exact amount would the "link kind" property need to be?

If, for instance, she finds a property that costs $550,000 and I would like to loan her the additional money needed to purchase the higher priced property, would that cause any issues with the "like kind" definition (or issues with me being an additional "investor" in the new property)?

I run a short-term management business. I’m looking for some advice on expanding my portfolio of short-term rental (STR) clients. I currently manage 10 doors scattered around the West Coast, but I’m based in NYC, so I’m location-agnostic.

If you’re an investor, what would make a STR or MTR property manager stand out? Appreciate any tips or strategies!

What lenders are you using and how upfront are you with the loan advisor on these buildings. Seems like 20% of buildings have some sort of non conforming unit. How are they zoned and appraised to get loaned on. This is Chicago specific in my case. I’ll take any recommendations out there. I’m in this situation now sorting it out.

I am trying to purchase part of a property and the seller will only sell the full property. I am willing to buy my portion of the property at a premium, but I am not willing to buy the whole property. Here’s an example (with fake numbers):

75 acres and a house for sale - $750k I want to buy 50 acres for $500k The house and the 25 acres would appraise for over $300k (I can get a CMA or appraisal to confirm)

I would like to be able to take this deal (buy a $300k property for $250k) to an investment firm (or other buyer) but I am unaware of any.

Do you have any recommendations?

Common Q/A:

1. Why not buy it myself? I can afford the portion I want to buy, I cannot afford the whole thing.
2. Why not get a loan? While possible, I would feel uncomfortable with such a large loan. So I would prefer to avoid that.

Over 27.5 years, a house can be deprecated on taxes. Now after 27.5 years, you lose the tax advantage and uncle Sam get their money upon selling.

My parents are in their 60s. So my idea is I buy in their names, depreciate all my properties then once my parents pass, I inherit and get another 27.5 years of depreciating.

What do you guys think? Does depreciation reset on Inheritance?

Hi. I am trying to pivot from a career in consulting to a career in real estate development. I don’t have real estate experience and I don’t have a real estate vocabulary. I’m a bookish kind of person and would love to spend some free time reading about how real estate finance works. I’m picturing textbook format. To the point, organized learnings. Anyone have any recs? Real estate finance bibles, MBA/MRSD textbooks your professors swore by, etc.? Thanks!!

Would you rather own a fourplex outright or four fourplexes with debt?

Love to hear your thoughts!

Hello, I’m looking to potentially purchase a triplex in San Antonio… 3 units, all rented out with long term renters (one has been there 26 years, and her daughter in the next unit over 10). Leases are up late next year with tenants stating they will stay After mortgage is covered, I am set to make an extra $798 ( number could be a little lower, I’ll find out tomorrow), rate is 6.75% with 25% down on $450k. The units were inspected with nothing major seen. New roof, foundation is good, etc. with project marvel just being announced, I am thinking this is a good long term investment. Any thoughts on this? Not looking for advice just opinions of course

I’ve found a couple of affordable properties, but they’re in neighborhoods with mixed reputations. What’s your checklist for determining if an area is worth investing in?

I'm preparing to purchase my first duplex and noticed the following in a listing:

"With 20% down, seller is willing to carry a six-month contract for buyer to refinance and cash the seller out. "

Can somebody (kindly) explain the benefit of the seller being willing to do this? New to all of this and still learning. Thank you:)

Super specific example

Subject commercial building in the middle of no where sold for 280k four years ago. Asking 500k two years ago. It did not sell. They wanted way too high. Now asking 400k with different listing agent.

Total rent two years ago was a bit over 5400/mo. Now total rent is less than 5000/mo. There are very few pictures of the insides: 7 studio apartments, 5 one-beds and a two-bed. It seems the new vacant units are in disrepair for essentials like working plumbing. There is a total of 4 furnaces and 3 water heaters.

Owner has a friend living in one of the units for cheap, a maintenance guy that lives for free and another tenant who cleans the common spaces weekly for rent that is next to nothing. The rent roll I have was from two years ago. Fair Market Rent for a studio apartment then was 518/mo. Rents for the studio apartments: 0, 175, 250, 250, 325, 350, 350. Extremely low rent.

Comparable commercial building on main street in a populous city--two years ago--sold for 325k (bought in cash). Gross rental income was 9000/mo. Compared, the subject property is in the middle of no where.

I'm wondering how to determine seller financing terms. For instance: 400k purchase price, 10% down immediately, 5% paid after six months, another 5% paid after another six months. Then 20 year seller financing at something like 5% interest rate.

Using their total rent from two years ago of 5400, without raising rent, my cash on cash return would be 20%.

https://imgur.com/OKcJPMB

Anybody have a lender who will do a HELOC on investment property in AL, TN and/or MD? I am also open to other ideas on how to tap into equity without doing a cash out refi and replacing my existing 3-4% rates.

Hello, I’m considering whether to sell or rent a condo I own. I lived in it for 2.5 years and just recently moved into a sfh. My original plan was to rent it out once I moved out, but I’m having second thoughts. I bought it cash at 120k, would say it’s worth ~180k in its current state. The main reasons I’m considering selling is

1. Avoids capital gains if I sell now.
2. HVAC will need replacing in the next 3 years most likely
3. We will have a 1800 special assessment coming up and they are planning on making all residents replace their decks within a year which will be about 4-5k.

Rent would be about 1800-1900 a month. Taxes are 2200 a year and HOA is currently 200 a month. Condo is located in Nj. Just looking to get second opinions as I am on the fence about what to do. My current home is in the same town as the condo so management would be easy.

I want to buy roughly 10 acres of raw land and build a starter house on it. My intention would be to keep the land for recreation and live in the starter home for the next 3-5 years then (assuming I’ll be married with another income) move into a more permanent house and rent the one we built. I want find the balance of a house I’m living in and what offers a good ROI for a rental. Is there anything I should include to attract future tenants or anything to absolutely avoid because of poor ROI? Thank you!

My wife and I have been thinking about getting into real estate for a while now and recently a condo came available in our city this weekend and we are strongly considering putting an offer on it. The condo is a small 2b 2b but is in a very desirable part of town. We are able to put down a 40% down payment on it. I am guessing that we would want to start an LLC and would need to talk to our mortgage lender about how all that works. Besides the LLC is there anything major that I need to be aware of before we continue down this path?

So this was my first full year in real estate investing. I closed on a 3 family last December. It went even better than I could have hoped for. Now, I see people seem to have an idea that their property went up in value. I have no idea if mine did or not. The zestimate on Zillow shows it’s worth 20k more than what I paid for it. But that’s not reliable. So what’s a true way to find your homes value?

My first rental property is a quadplex, gross 3200 per month and i end up with 1200 in profits. Owe 95k @ 6.5%

I need to replace the siding of the house its pretty old (the house is 110 yr old) and with that replace the windows before hand. Friend quoted me 60k to do everything. (Its a big ass house) if i do a ccash out refi or a construction loan i can do this plus replace the front porch. But my profit will go down from 1,200 to $800 since i will have to refi once the construction is done.

Here's my question....

Do i focus on fixing up the property to perfection with that 60k and effect my cashflow.

Or

Do i take that money and possibly buy 1-2 more single family houses?

Let’s say I sell a property for $2m where my basis is $1m

Gain is $1m

My understanding is that if I decided to only invest 500 K in the next property, say at 50% LTV and buy a $1m prop, the other $500k in gain would be taxed.

But let’s say I own 50%, so my gain is $500k and my partner’s is $500k.

I still want to take my $500k and buy a $1m property, but my partner wants to take the cash.

Would I owe any taxes for my partial 1031, or just my partner?

Thanks

If we want to split up, and I want to invest $500m

My parents want to purchase a manual car wash business. It’s in a good location and apparently comes with the property that it’s on. They want to buy both the business and the property.

In my head, I’m thinking the property could be valuable as an asset to have that can be sold in the future. The car wash would let the land have a use and be a revenue stream.

That’s just what I’m thinking off the top of my head, but obviously I’m not an expert in real estate, neither are they.

Do y’all have any advice on a situation like this? Anything we should watch out for or do more research on before buying.

Honest answers only please, if you have an agenda, I’ll likely smell that from a mile away — you’d just be wasting your time.

Not at all interested in buying a course or any services from anyone, period.

I’m asking this for a friend who’s a GC in California, it’s something he’s looking to pursue, he’s seeing all the optimistic side of it.

I’m pretty sure reality is mostly pessimistic with this industry.

Please be honest, just trying to help guide my friend before he makes a big decision like this.

Again, if you’re trying to sell your services - you would just be wasting your time, that’s a 100% guarantee

Edit: This is in California only, I guess he’s licensed in California so building elsewhere is out of the question.

Tenants have refused to show the property despite it being on the market and they have been notified. I've heard conflicting advice from different real estate agents about whether or not I can show the property.

One says I can show the property as long as I've given them notice. The other says no that we require tenant's approval.

I’ve been searching for deals nonstop for 2 years now, run my own business and everything is over priced. My rule of thumb is the 1% rule (monthly rent needs to be 1% of purchase price). It’s nearly impossible to find a property on MLS( got my license just to represent myself). Looking for add value property in Chicago, all “turnkey” 1-4 unit properties are extremely over priced, would only break even if I lived in a unit.

What I’m really asking is, how do I find off market properties?

I just moved out of state from my primary residence which I have a HELOC on as of Jan 2024. When I moved I rented it out to tenants. I am planning to switch over the homeowners insurance to a landlords policy but fear that the bank will revoke the HELOC now that it is no longer my primary residence. How does this work? Would the HELOC stay open? Would they revoke it? I’ve never run into this until now

I am refinancing a rental property in Oak Ridge TN through SOFI. The appraisal was done last week, but the appraiser is saying he can't find any comparables for the appraisal. The issue is that all of the 4 bedrooms are on the lower floor which is being called the basement - the appraiser is saying he can't find a house with all bedrooms in the basement. Sofi has now canceled my refinance because the appraiser can't find comparables - incredibly stressed out on how to proceed.

Any advice would be appreciated.

My tenants want to use our contractor but pay upfront for an upgrade to our house that we planned on doing next year maybe. It’s adding stairs and railings to a 3rd level patio that has an ocean view. They want to pay for it now and then have us discount it from their rent over time. I was thinking of asking them to pay for half if they want it done right now. We never agreed to do it but did plan on it in the future. What do you think?

I'm wanting to install surveillance in a 3 unit property but there isn't a common area and there's only 3 breaker boxes. It may need wifi as well but I'm wondering how I should go about this. The unit it would likely be getting power from now is vacant and the electricity service is under my name, should I just include that in the lease and cover electricity? The area that I'm in would make a section 8 tenant likely, so how should I navigate the rent/utility price to make sure I'm not ultimately losing money by covering electricity or charging them a flat fee and having them abuse it.

Similar situation with internet, might not be a huge concern since I'm leaning towards hard-wired cameras vs wifi but still, I have a router in that unit now but I'd like for it to only be for the surveillance. It's Xfinity's most basic plan so I'm getting 50 Mbps and I'd imaging with many devices, it may hinder the connection to the cameras. The surveillance guy suggested a lockbox for the NVR, so I was thinking the same with the router but am also concerned about it affecting connectivity of the router.

How have you guys navigate situations like this? TIA

I'm leaning towards selling my inherited childhood home in the spring. I teased this idea in August to the property manager and he said as long as I give 60 days notice to the tenant it will be fine (They are month to month). He also said he can work with me see if the tenants will purchase the home but we didn't get into much details.

Obviously I want to get top dollar for it. My gut is telling me to just give the tenants 3 months to move out as a courtesy, and putting up in the open market is going to give me the best return utilizing a 3rd party realtor instead of my PM (also a realtor). I'm considering using Redfin for the 1.5% listing and 2% for the buyers agent. Do I even want to go down the route of selling to tenants and what would be reasonable compensation for the property manager if I do let him run with it?

TBH I've not had the best vibes with the PM. He has pushed back when I wanted/needed to increase the rent or has pushed me to purchase higher end appliances when things have gone out because "we need to keep the quality that the renter expected when they signed the lease". I just don't always feel that my interests are always top priority. That said, he's a nice guy and I have been pleased with the tenants overall.

What are some pros and cons as to trying to work something out with the tenants and just putting it on the open market? I would love to hear from some of the experienced sellers and the best way to do this.

For some context on the home value, it was appraised for $850k a year and a half ago. I put 400k of my own cash to buy my sibling out so I need to come out with at least 800k after fees. I do not have to pay much in capital gains since it was inherited if I sell now which is the main reason I'm selling. I can't rent it for for enough to justify the opportunity cost in equity ($3500)

Hello. My husband and I are looking at purchasing a vacation rental home in MN. We currently live in Ohio, but I’m from MN. I am hoping to talk with someone else who does this in MN!! Looking for any advice and/or suggestions. This has been a dream of ours for a long time. TIA