Urgent: Need STR Market Advice to Slash Capital Gains Taxes – $250K Ready to Invest!

[Yair Zarmon]

Hi BP Community,

Newbie real estate investor here looking for some guidance from those with more experience.

I'm in a unique situation where I need to quickly purchase and manage a few short-term rentals (STRs). The reason? I sold a number of securities this year and must reduce my capital gains tax liability. To do this, I need to acquire STRs and prove material participation. That's not the hard part...the real challenge is choosing the right market on a short timeline without prior STR experience.

I’ve spent countless hours researching, underwriting, and convincing myself I’ve found the perfect market - only to second-guess and start over. I’d really appreciate any guidance or recommendations from those who have been through this process before.

Key details:

1. Out-of-state investing: I’m comfortable being a remote investor. With today’s automation tools, managing from a distance isn’t an issue.

2. Budget and financing: I have $250K set aside for this investment, and financing is essential to qualify for bonus depreciation and cost segregation - key strategies for offsetting my long-term capital gains.

3. Time sensitivity: I need to prove at least 500 hours of material participation before December 31, 2025, so time is of the essence.

If anyone has market recommendations or insights, I’d love to hear them! 

[Travis Timmons]

Just pay the taxes rather than rushing into an investment that you don't fully understand. If you love STRs and want to be in that business, then invest. Otherwise, pay the tax bill and move on. There are worse things than paying a lot of money to the IRS. 

Also, 40% bonus depreciation doesn't move the needle all that much. If 100% comes back, different story, but you're making a speculative bet on that and the tax tail is wagging the dog.