Bad Investment Strategy?

[Michael Hyun]

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $900,000
Cash invested: $180,000

Bought a negative cash flow property - about $1500 a month negative. I'll long-term rent it out and eat the negative cash flow, and do cost segregation and bonus depreciation. My fiance/soon-to-be wife holds REP status, which will allow us to take close to a 250k write-off in year one, which we'll use to buy cash-flowing properties.

What made you interested in investing in this type of deal?

It's purely a bonus depreciation play - although home prices may fall, I'm planning on holding this for the next 10 years or longer. I plan to use the huge tax savings from this property to buy cash-flowing properties.

How did you finance this deal?

20% down, 4.375% 7/6 ARM loan.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

Eileen Kim - my fiance.