Invest in low /middle low income apartment - Posted by CA

Posted by KJ CA on April 04, 2005 at 22:05:22:

No, you don’t want to fool around with your “principal residence”. You probably declare mtge interest and property taxes on Schedule A for your current residence. The rental property will have a basis for depreciation. If you live in one of the units, you can’t depreciate it. And if you continued to deduct your “home” deductions, that would be fraudulent.
Don’t pretend to live in your investment properties. It would cause you years of headaches.

Invest in low /middle low income apartment - Posted by CA

Posted by CA on April 03, 2005 at 23:38:06:

Are there a lot of successful investors doing low/middle income apartments?
I know there a lot of turnover, more maintenance, and evictions but it is easier to get finance and requiring less funding.

Can a biginner start with this, what are some of the most important tips to be successful, say with 4-10 units? Does using property management company help so this won’t take much of your time from f/t job?

Re: Invest in low /middle low income apartment - Posted by Mark (SDCA)

Posted by Mark (SDCA) on April 07, 2005 at 11:07:17:

You just put your thumb on all the problems: I know there a lot of turnover, more maintenance, and evictions.

They will be VERY labor intensive. Personally, not my cup of tea. And not what I would reccommend for a beginner. IMO, turnover kills.

Re: Invest in low /middle low income apartment - Posted by CA

Posted by CA on April 04, 2005 at 12:12:16:

Thanks Frank and Randy for good advise. I agree 4-unit is a good start.

I already own a home and have good equity, thinking of using HELOC for some down payment if needed.

I might be able to live in one of them, but actually I may be sublease it to someone else I trust. Would it be any legal problem to maintain 2 residence in the same area, any tax benefits?

Re: Invest in low /middle low income apartment - Posted by Frank Chin

Posted by Frank Chin on April 04, 2005 at 09:04:15:

CA:

Agree with most of Randy’s points.

  • Do a 4 plex in a better neighborhood, and live in one of the units yourself.
  • As Randy mentioned, a 4 plex is a lot easier to get financing, and you even get owner occupied if you live there.
  • With a 4-lex, you can have one tenant play manager, or if you live there keep tabs on things a lot better.
  • Difficult to get a management company to do a good job for properties of this size.
  • This is how I started when I was a beginner.

Frank Chin

Re: Invest in low /middle low income apartment - Posted by Randy (SD)

Posted by Randy (SD) on April 04, 2005 at 08:54:19:

Start with 2-4 units, reason being these are normally classified as residential for financing, over 4 units is commercial. I would not recommend using a property management company initially, you must learn how to manage your own properties first. I say this for two reasons, no one will care about your property or your cash flow like you will, secondly if you have no experience in property management yourself you’ll have no idea if you’re PM is doing a good job (suppose they tell you it cost $300 to fix a leaky faucet, would you know the difference?)

Re: Invest in low /middle low income apartment - Posted by Tamara Estremera

Posted by Tamara Estremera on June 28, 2005 at 19:44:24:

i am looking for a low income appartment. i am single female no kids. just looking for a affordable place to live