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All Forum Posts by: Alan Grobmeier

Alan Grobmeier has started 19 posts and replied 900 times.

Post: Prop 19 in California

Alan GrobmeierPosted
  • Rental Property Investor
  • Phoenix, AZ
  • Posts 919
  • Votes 911

@John Erlanger, rental property in Cali is generally a negative cash flowing proposition.  You’d have to put down more than 50% for any positive cashflow.  Your only return is appreciation.  That’s not called investing, it’s called speculating.  
Why would you want to make rentals more scarce & pricey?

Post: Prop 19 in California

Alan GrobmeierPosted
  • Rental Property Investor
  • Phoenix, AZ
  • Posts 919
  • Votes 911

@John Erlanger, if you own any property in Cali, you benefit from prop 13.  Your property taxes were based on your purchase price, whenever that was in time.

It benefits ALL landowners, not just the rich.

Let’s say you bought your house for 500k 20 years ago.  Today it’s worth $1Mil.  Your taxes are still lower than that person that buys a $1Mil house today.

Post: Prop 19 in California

Alan GrobmeierPosted
  • Rental Property Investor
  • Phoenix, AZ
  • Posts 919
  • Votes 911

@John Erlanger, I believe there are maximums on gifts, then there are gift taxes.  No way out.  Just sign your property over to the state, one way or the other.

It’s the first nibble of many upcoming bites to prop 13. 😢

Post: Prop 19 in California

Alan GrobmeierPosted
  • Rental Property Investor
  • Phoenix, AZ
  • Posts 919
  • Votes 911

@John Erlanger, because that has been the law for the last 45 years.  And those properties do not collect 'at market' rents.  The prices are usually below market so they can attract long term tenants.

If you think rents are unaffordable now, come back in 5 years when some of these properties have turned due to being inherited.

An apartment complex, when inherited, will still be an apartment complex.  It will be owned by the ultra-rich that can afford (for a time) the rise in property tax.  EVENTUALLY that cost will be passed along to the tenant.  It always is passed along.

A transfer of wealth TO the 1%.

Prop 13 was created to stop these type of situations where ppl get taxed out of their properties.  I am beginning to wonder if you are a real estate agent, from California, or even understand Prop 13? 

Post: Prop 19 in California

Alan GrobmeierPosted
  • Rental Property Investor
  • Phoenix, AZ
  • Posts 919
  • Votes 911

@John Erlanger, I think there would still be a reassessment for half the value when the parent passes as it is a step up in basis for half the property.

I am not impacted, but my kids will be upon my passing. The property I own is a sfr. My ROI is much lower than my AZ properties. Add on a ton of property taxes & it's not worth keeping.

I doubt that I’m ‘unique’.  There will be very few, if any, sfr rentals in the future with this law.  And IF there are, the prices will be out of sight.  I doubt it helps ‘affordability’.  

Imagine when whole apartment complexes are inherited.😱

Post: Prop 19 in California

Alan GrobmeierPosted
  • Rental Property Investor
  • Phoenix, AZ
  • Posts 919
  • Votes 911

@Alice Chen, that's bad advice.  It puts your kid on title today, which will cause a reassessment today.

I keep on coming back to the 'usage' part.  It should not matter what the use is of a property.  In other places the tax is the tax and you get a owner/occupant break if you are the owner and live there.

This is a bad law and you ppl in Cali got hoodwinked over the ppl impacted by wildfires.  

Post: Prop 19 in California

Alan GrobmeierPosted
  • Rental Property Investor
  • Phoenix, AZ
  • Posts 919
  • Votes 911

@Al Lee, put a 'death' clause in your rental agreements that voids them if the LL passes.

Post: Prop 19 in California

Alan GrobmeierPosted
  • Rental Property Investor
  • Phoenix, AZ
  • Posts 919
  • Votes 911

@Katie L., this prop seems counter-intuitive to what is needed.  I own, for example, a property in La Mesa.  I am presently renting it out.  

Since the exemption 'dies with me' (kids have their own lives), I have zero motivation to keep the property.  So I sell.

Now there is one less affordable rental as property taxes have been raised significantly from what I am paying.  It will be owner-occupied only.

However, let's  say 'little susie', my daughter, decides to live in it.  She has a health crisis in her old age and decides to rent the property in her last years.  OOOOOPS, can't do that without a reassessment of the property taxes?  Really?

If rental properties are inherited, they will be quickly sold as it is not financially feasible to run them.

How is this good for keeping housing affordable?

Thx,

Alan

Post: I got my 1st virtual wholesale contract now what?😰

Alan GrobmeierPosted
  • Rental Property Investor
  • Phoenix, AZ
  • Posts 919
  • Votes 911

@Luis Serrano, Mississippi Gumbo isn't just a food.  ;-)  The south is rampant with foundation problems due to the water content of the earth/ground.  The exception to that is parts of Florida where the foundation is dead coral.

There goes your 'good spread'.

Post: Prop 19 in California

Alan GrobmeierPosted
  • Rental Property Investor
  • Phoenix, AZ
  • Posts 919
  • Votes 911

@David Chen, my expectation is that most will sell after inheriting a property.

IMHO it really sucks that the 'use' matters.  Seems kind of Draconian to me.  The tax rate should be the rate, regardless of use.  I think there should be a court case or two brought.

But as my CPA explained to me:  Very few ppl pass their property past the 2nd generation.  Most ppl MOVE every 7 years or so, which changes the tax basis as well.

The ppl impacted by this are a true 'sliver'.