Advanced Accounting In Quickbooks
hi,
THis is related to quickbooks if i own rental properties and do property
management:
specificially: how would i record 1031 transactions? (sell a house and "1031
it" into another new house within some set time period without paying
capital gains)
secondly: how would I manage a self directed ROTH ira that owns rental
property?
these are very specific questions, i hope you all can help, thanks!
Jonathan
Your best bet is probably to start shopping for lenders for a refinance. You didn't mention what rate it is at. You could also manage it yourself and save the 8% that you're paying out everymonth for someone else to collect the rent.
After making all of your payments on time for 6-12 months you can probably get a better rate.....however, rates will most likely be higher for everyone then also, so you may get a "lower rate" compared to what they're going at, and be paying about the same.
Sounds to me like this was more of an educational investment than a profitable one. Time to re-write your game plan and figure out what you did wrong.
What are you hoping for with this property??? Rents generally don't rise very quickly. You could easily be negative cash flow for 4 years. Can you sell it to get out from under it?
I'd write this one off as an education, pull out your money, figure out what went wrong, and try again on a different piece of property.
Good luck.
All I can say is....Holy ##*@!!! $700 negative CF per month BEFORE other expenses? I'm glad I don't live in California...
I don't really understand what your looking/asking for? Its a bit too late to say yes/no on the deal..
.I'd be saving the 8% property management fee until the thing starts to cash flow alittle better...
Jeez! $600+ Negative Cash Flow a MONTH! Just after debt service and management!!! WOW
I would definitely get rid of the management company if you can. Saving that 8% will really help you financially - at this point anything will help. Thinking positively, getting rid of the management company will also teach you about landlording which could be helpful in the future. You are not making money on this deal but you can still learn something.
After saving the 8% I would then try to sell. I have friends that invest in pre-construction and they basically bank on the appreciation during the contruction period. This might not be for everyone and the area they invest in is a ridiculously popular area in south FL; however, I mention it b/c you might be able to sell the home (even now) for a slight profit and get out from under the financial burden.
Good luck
rmdane2000 - no need to make the person feel worse than they already do.
rmdane is right about the property management, in my opinion. I would definitely manage it myself to cut as much of the "hurt" as possible. You'd probably do just fine managing one family on your own.
As for the home, I don't suppose it would be too late to offer the doctor a L/O. It would give you some cash to help your monthly payments or invest elsewhere, and you could probably get more for the lease by making the option exercisable sooner than normal - like 6 months or a year. This short time span would also help you get out from under the house sooner.
How long is he signed for? If he doesn't want to L/O, then L/O it to the next person, or just sell it outright to the next person. Finance the sell, you could make more cash than you would by having your buyer get a conventional loan because you would collect the interest.
Just some ideas. Hope it helps.
Don't give up on RE. Try again. Consider this tuition.
I'm just saying it like it is...My mouth dropped open when I read the post. He never says he considers it a bad deal...that i remember...After thinking alittle bit, maybe its time to bail out? It depends on what your looking for...if your looking for long-term appreciation...maybe this isn't that big of a deal (once you've refinanced)...if its in a new development area of SF, its likely going to appreciate at a rapid rate, right? (not familar with your market, but hear about it alot!)
Also, my mortgage broker is always saying its easier to refinance than to buy, once you own it, banks are more lax about lending money...
I congratulate you on taking this step at this early stage. By the time you turn 30 (which is when most people start thinking about investment) you will have a head start.
I would be interested in hearing your thought process when you were going through the deal... Did you try to calculate the payment? did you do market research to see how much rent you will get? what was your plan at that time and how have things changed since?
HomeWork.........WOW, I would also like to know your what your Exit Strat. was when you started. How you found the deal(not a good deal). What were the closing costs and what is the ZIP Code.
Are you expecting hugh appreciation to come about in the next few monthes or years. You might find out if the now tent would be interested in being a home owner and structuring a Owner finance deal to get you back on the positive side and what are the terms of the loan?
Lots of question unanswered in you due diligence Check list Homework and Exit stratagy. Education is going to cost you one way or the other. But I do congradulate you for starting and Doing it Anyway. Learn from it and go and make mistakes don't beafraid Your on the right track, it would be lost education if you don't continue in RE and it would cost you more latter.
Good LUCK
Dave
Thanks for the replies. I will be looking at both a refi and possibly selling the property ASAP. The tenant is currently on his first month and is in contract to rent for AT LEAST one year. I am aware that there are pre-payment penalties if I sell the property before 2 years. However, rather than continue to hemorrage money I am definately leaning towards selling the property which at the moment has appreciated since its pre-construction price.
Let us know how it turns out. I hope you can sell it.
The current renter may not want to buy it when he realizes that buying means paying higher monthly fees - sell him on the fact that as a renter he is throwing his money away, but as a buyer he is investing it. I do not see the possiblity of selling it to someone else while he's in it, paying less than the mortgage.
I hope this works out well.
Quote:
On 2004-07-13 23:55, TommyKaz wrote:
...I am aware that there are pre-payment penalties if I sell the property before 2 years...
If you offer seller financing (where you act as the bank to the potential buyer and they basically lease option it from you, you aren't technically selling it (from the lenders point of view).
Where do you and your brother currently live. You mention a lack of credit hisory when you bought wich leads me to believe you currently rent. Could you and your brother live in the place for now and wait on it to appreciate??????