All Forum Posts by: Aaron Zimmerman

Agreed with the advice on here (not your accountant). Whatever your income and expenses are is what they are. Of course, you'd want to do some tax planning to see how to raise your income legally (i.e. work more hours at your job, opting out of bonus depreciation for assets <20 years, etc). 

There are a good amount of CPAs/EAs that specialize in RE. I'd say to not limit yourself in your search (i.e. remote will broaden your scope). Further, you will want to talk to your CPA about also being a tax strategist. I'm sure there's some additional planning opportunities that would reduce your taxes. I would ask around at local REIA or look on here.

What area are you located in? Are you willing to work remotely with your CPA? What are you looking for in a CPA? Are you looking for tax preparation or also tax advice?

Capitalized means depreciating the asset over a longer time. For example, you buy a place for $300k. Of that, a portion (80%) is building and the remaining portion (20%) is land. As such, $240k is the cost allocated to the building. That must be depreciated over 27.5 years. Your yearly depreciation deduction is $8,727 (240,000/27.5). Another example would be rehabbing a place. Since these would likely be improvements, you would depreciate them over 27.5 years. The IRS has useful life tables that you can look up at your leisure. 

If your budget allows, I'd say to look into a 4 unit. From what I hear, I think you'll get more cash flow and bang for your buck. Portage Park is a fantastic area. If you're following path of progress, just keep following the blue line. Let me know if you have any questions related to house hacking and I'd be happy to share my experience. 

@Michael Plaks is well known within the BP Community and has provided a ton of value (and witty comments).I'd reach out to him. 

Another strategy, if you're looking to be more passive is to go the syndication route. I don't know your exact situation, but if you have cash on the sidelines, you could potentially invest in a syndication delivering double digit returns. However, if you're looking for more active, I think the BRRRR is probably the best way to go if you can swing it! Perhaps you can even get your kids involved in the rehab process. Just a thought. Hope this helps and feel free to connect.

You definitely have some good performing rental properties! Unfortunately from the tax side of things, you do have a tax hit. The biggest thing is to make sure you're getting the QBI deduction (20% off business income). You will want to discuss with your accountant to ensure you qualify, but instead of paying tax on 30k, you'd be paying tax on 24k. 

As stated above, the LLC won't help you out besides generating more expenses and the potential for additional tax filings (if multi-member).

What you are looking for, in addition to tax preparation, is tax advice. This is a separate service and is may be billed out at hourly rates. However, a portion of the tax advice fees are deductible against Schedule E income, assuming you're discussing Schedule E. I would recommend finding someone who files your taxes and does tax strategy. There are a lot of qualified individuals on here that do this service. 

I second @Jonathan Klemm's question. Why not invest in Minneapolis and perhaps do the house hacking strategy? Your dollar will go further there. Should you need any connections, I have a friend that recently completed his house hack in Minneapolis that would be a wealth of knowledge. He bought a fixer upper and it has very strong cash flow. I'm from Minneapolis - now living in Chicago so I'm a bit partial to my hometown! Absolutely love Chicago though but a bit tougher if you're looking to go remote. I also think Minnesota has a friendlier business climate as well.

I personally think the best strategy would be a house hack. It's tough to lose because you're saving money on rent, building equity, getting tax benefits along the way, and becoming a more skilled landlord assuming the property is purchased correctly. You absolutely have to be aware of local laws so familiarize. Also, tune into the meetup groups to broaden your network. Feel free to PM and I can send you them.