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Updated 2 months ago on . Most recent reply

Taking a small loss to save on taxes?
Hello all,
I am looking to buy an apartment building. Right now, the best offers around me are for some 1.3-4 million, that only generated around 100k per year gross, so there would be a high chance of not cash flowing, and paying money, especially with a commercial loan (these buildings have more than 4 units).
I was thinking that although the rental itself does not generate money, I would be able to deduct the mortgage interest, and depreciation from my personal w2 income and would be net positive. I am in one of the higher tax brackets and could be saving around 40k~ a year on taxes with this. Mean while i would be building equity, and if rates do lower, or when the term ends, could refi for better rates and then maybe cash flow.
My questions are:
Is this too naively optimistic?
Obviously there are risks if I get laid off and would loose all the tax savings and be paying out of pocket for the property, but are there other things that I should consider?
Thanks all
Most Popular Reply

For me I would not buy a property with zero or negative numbers. Look harder. I spoke in Raleigh, last April and think its a great place to invest. BTW, I just bought 5 properties in 5 days in 3 states. Even though there is low inventory, interest rates are high, and many properties don't cash flow, look harder there are always deals, you just need to find/make them.