All Forum Posts by: Adriana McLaughlin

I am familiar with DSCR for a 2-4 unit, but when you go to 5-6 units, what happens? Does the interest spike much higher? Higher down payment required? Thanks.

Quote from @Aaron Zimmerman:

@Jonathan Klemm - thanks for the shoutout!

This is a very nuanced conversation. The biggest thing I’d say is to not let the tax tail wag the dog. If your highest leverage activity is earning money through a w-2, then stick with it. 

When you make over $150k MAGI, you can’t take losses against active income. However, those losses do roll forward each year until the property is sold. 
I’d recommend the straight up Chicago investor podcast, tax free wealth, and amanda Han’s tax books if you want to read more about it. 

 Thanks for your reply. I love the SUCI podcast, and will try your other two recommendations. I clearly need to get more educated on my tax situation!

Quote from @Joshua Thompson:

Quote from @Adriana McLaughlin:

I have a W2, but also have a real estate license, though I work very little in actually selling real estate. I just bought my first investment property in Chicago, and have been busy doing minor repairs, furnishing it, and getting it ready for rental. I am thinking of a second investment property but I am curious. If my AGI is over the $150k (not including husband's income) do we not qualify for tax write-offs/deductions? I don't want to quit my W2 job. But when you work 40 hours W2, you cannot work full time in real estate as well? What good reading resources should I get to understand the best ways for me to maximize real estate investing to offset the taxes we pay on our W2 income? TIA.

 When your rental produces a loss in excess of income (AGI) you have a passive loss. You are able to deduct that passive loss up to $25,000 if your income, including your husband's if filing jointly, is below $100,000. Once the income is between $100,000 - $150,000, the total $25,000 allowed quickly reduces to $0 once your income is over $150,000. At this point, you will need to look into other strategies to be allowed to reduce your W-2 income with excess rental losses. Some strategies you can look into are short-term rentals or becoming a real estate professional.

It will be difficult to be a real estate professional if you work a full-time W-2.

Thanks for your advice. Would love an STR, but don't think Chicago is good for that.

Quote from @Jonathan Klemm:

Hey @Adriana McLaughlin - I am not a tax expert, so I am tagging @Steven Hamilton II and @Aaron Zimmerman both local Chicago accountants.

If you are even considering becoming a real estate professional and leaving your W-2, it sounds like you already have your answer—you should totally do it!

Is the next investment going to be in Chicago as well?  Out of curiosity, what neighborhood was the first property in, and how has it been going?

Not sure I want to leave my W2 - I have a good gig, hard to give it up. So maybe a 2nd property does not make sense now. I bought a condo in Lincoln Park, it is rented, but I already don't like dealing with an HOA, lol!

I have a W2, but also have a real estate license, though I work very little in actually selling real estate. I just bought my first investment property in Chicago, and have been busy doing minor repairs, furnishing it, and getting it ready for rental. I am thinking of a second investment property but I am curious. If my AGI is over the $150k (not including husband's income) do we not qualify for tax write-offs/deductions? I don't want to quit my W2 job. But when you work 40 hours W2, you cannot work full time in real estate as well? What good reading resources should I get to understand the best ways for me to maximize real estate investing to offset the taxes we pay on our W2 income? TIA.

I am looking for a DSCR lender in Chicago for a property with a 1:1 DSCR ratio. Wondering what the rate for that would be and if anyone can recommend any lenders?

Thanks.

There is a condo in Chicago that allows STR. If I were to buy it, would I have to apply for the license with the city, or is the license for the property and not the owner?

Thanks, new to this STR stuff.

Adriana

So the power is really in the fact that it is a heloc/checking account combo. I deposit my paychecks there and for all the time the money would usually sit idle until the bills are paid, the heloc interest calculates daily, so it would be lowered by my deposited income. It only works if you make more than you spend. So for instance, if I have 20% leftover every month, that goes directly to principal. 

It is a variable rate heloc, but with today's mortgage rates which are so high, it might be a wash. It would not work as well, I assume, for my primary home, where my interest rate is 3%.

There is a calculator at: https://www.allinoneloan.com/#calculator

The calculator says it should work well for my investment condo - but I would actually love to hear from others who might have taken out this product and paid off their property much faster as a result!

Has anyone tried the All-in-One first-lien HELOC product? I am thinking about it for a Chicago investment condo. Do they still come with high closing costs?

Hello: My name is Adriana Rodriguez McLaughlin. I live in Garden City, a suburb of NYC. I have a realtors license for over a decade but only work sporadically as I have a W2 job. I love real estate and listen to BP podcasts daily. And I think I want to take the leap soon to REI. Also one of my goals is to reduce tax burden on W2 income - especially since new tax laws on SALT deductions will hurt me further. I think I would enjoy fix/flip as I have renovated two homes. But also love the idea of buy and hold - despite my fear of being a landlord. Anyway, love this sense of community I feel reading/listening about everyone’s stories on how they got started, really inspiring to me.