Some Buyers who own mult family property are getting paid cash and not reporting it therefore saving on taxes.
This is a huge mistake!
First of all it is against the law,
And second of all, your building is only worth according to the income it yields. if it yields less (according to what you report) it is worth less! Any commercial mortgage lender will give you a mortgage only against the income of your property and not merely on the comparable. And in most cases the income on the property needs to be substantiated before the lender can determine how big of a loan the property can support.
the same disadvantage you might also have when selling the property, since any savvy buyer will ask to see the schedule E of your tax return to substantiate income and expenses you might not get the full value.
So we as real estate professionals or mortgage professionals we have to advise our clients to shoot straight and reap the benefits.
Look at the taxes you are paying as an investment in the value of your property!
Just a thought
Joel Silberstein
Joel,
Apartments aren't the worst. Try Bars and small restaurants.
Welcome to AR, you've had a busy week. We'll take again.
Bill
William J Archambault Jr
The Real Estate Investment Institute
First National Mortgage Sources