Rental #1: Docs Signed, Money Wired
I've signed all the documents for Rental #1 today, had them notarized, and mailed them off to the escrow company this morning. I've also wired the funds. We're all set to close on Monday, a couple days early!
Phone Excise Tax Refund Not Being Claimed
One of the huge advantages of investing in real estate is the special tax breaks you can take advantage of. Many people invest in real estate solely for those reasons and yet, they fail to take advantage of even the simplest tax saving strategies. For example, msnbc.com is carrying an Associated Press story about how roughly one-third of the early tax returns filed so far (over 10 million of 31.8 million) have failed to claim the telephone excise tax refund offered this year and a surprising number of those were returns filed by professional tax preparers. Granted, itemizing the bills might be a bit much for most people, but claiming the standard credit is as simple as filling in one additional line on your return. To me, there is no excuse for a tax professional to miss this deduction. If yours doesn't claim it for you, fire them.
The standard refund is between $30 to $60, depending on how many dependents you are claiming. If you have your phone bills from 2003 and later, you can itemize and get a refund of the actual amount you paid plus interest. I actually do have all those bills and spent an hour or two last weekend adding up amounts. My total: just over $250! And this is a tax refund, not a deduction, so it is a dollar for dollar reduction in your tax bill. I should state that the reason my credit was so high is because I have four phone lines, so your credit might be less. Use IRS form 8913 from the IRS to itemize the credits. The instructions for filing out the form are here. If you are taking the standard deduction, you do not need to use a special form. I should also note this credit is good for the 2006 tax year only.
The standard refund is between $30 to $60, depending on how many dependents you are claiming. If you have your phone bills from 2003 and later, you can itemize and get a refund of the actual amount you paid plus interest. I actually do have all those bills and spent an hour or two last weekend adding up amounts. My total: just over $250! And this is a tax refund, not a deduction, so it is a dollar for dollar reduction in your tax bill. I should state that the reason my credit was so high is because I have four phone lines, so your credit might be less. Use IRS form 8913 from the IRS to itemize the credits. The instructions for filing out the form are here. If you are taking the standard deduction, you do not need to use a special form. I should also note this credit is good for the 2006 tax year only.
Rental #1 Closing On Monday
I got the HUD for my Tulsa property today and, surprisingly, I didn't find any errors on it! I think that's a first! Assuming it's okay with the seller, we're going to move the closing up to Monday instead of the 28th.
On another note, another one of my arbitrage plays paid off today. Picked up 20 shares of HQSM back in December for 21 cents a share, got reverse split down to 1 share, received my 99 round up shares today to bring me to 100 shares, and I sold at $6.41. Including commissions, that's a profit of $622.79 in 79 days and and annualized ROI of 25,645%. Unfortunately, these arbitrage plays are getting harder to find. I haven't found any since the first of the year.
On another note, another one of my arbitrage plays paid off today. Picked up 20 shares of HQSM back in December for 21 cents a share, got reverse split down to 1 share, received my 99 round up shares today to bring me to 100 shares, and I sold at $6.41. Including commissions, that's a profit of $622.79 in 79 days and and annualized ROI of 25,645%. Unfortunately, these arbitrage plays are getting harder to find. I haven't found any since the first of the year.
Rental #1: Insurance For Tulsa Lined Up
Since I plan on getting another rental property this year, I figure I better start numbering the properties. This will be Rental #1. (Houses I will be rehabbing are numbered House #x.) I'll also start using labels for my posts for easier searching.
I called the insurance agent that the current owner uses for this property to get insurance for when I own it. The quote given me was a pleasant surprise: $388 per year. If I want to add water damage protection due to broken / frozen pipes, it's $419 a year (assuming the house qualifies). That price includes basic coverage for the cost of the house plus $100,000 in landlord liability coverage. The good news is when I ran the numbers for this property, I used the insurance cost the seller is paying, which was $464. Don't know why my costs are cheaper. Maybe I have a better credit score?
I called the insurance agent that the current owner uses for this property to get insurance for when I own it. The quote given me was a pleasant surprise: $388 per year. If I want to add water damage protection due to broken / frozen pipes, it's $419 a year (assuming the house qualifies). That price includes basic coverage for the cost of the house plus $100,000 in landlord liability coverage. The good news is when I ran the numbers for this property, I used the insurance cost the seller is paying, which was $464. Don't know why my costs are cheaper. Maybe I have a better credit score?
