All Forum Posts by: Allan C.

@Graham Kuzek also note if you lived in property as primary or converted to primary after using as a rental, you may be eligible to claim some capital gains exclusion on a pro-rata basis. The conditions vary depending on scenario so you’ll again need guidance from your accountant.

@Graham Kuzek as others noted, whether you claim the benefit of depreciation or not, you are obligated to report depreciation recapture. Thus you potentially lose current year tax shield advantages or you potentially lose accumulating suspended passive losses that can offset future depreciation recapture.

From an investment perspective maximizing current year cash flow gives you the best chance of maximizing the NPV of your investment. So if we ignored this whole depreciation recapture concept, you would likely benefit from the tax shield aspect of claiming depreciation, even if it resulted in capital gains burden in the future. If you have an Excel workbook plug in the IRR formula to verify the math.

They key is to keep reinvesting your free cash flow.

@Graham Kuzek there is only one right answer here for your US property. Depreciation is your friend if you use it and your enemy if you don’t. Your understanding of capital gains treatment is incorrect so please talk to your accountant. Ask them about unsuspended passive losses and depreciation recapture.

@Dakota Adney more units = more headaches without necessarily higher returns. Returns are proportional to risk and effort. The real vale of more units is diversification. Do you want your equity concentrated in fewer properties or spread out over more?

@Bryan Danger

My exit - none planned

My goal - leave a sustainable business for my offsprings to manage as a fall-back option

@Mallikarjun Reddy Pateel return is inversely proportional to risk and effort. Seeking high returns for low effort and risk is low likelihood. You’ll have to define what is more important to you - yield or risk/effort?

@Carlos Tapia I have bought and sold several properties in Bay Area and Chicago over the past 20 years. Bay Area has consistently out-performed Chicago by a significant margin.

I recommend buying a primary in the bay that you can house-hack, which comes with a significant capital gains avoidance option down the line. It’s also easier to manage local vs remote for new investors.

@Yasir Einaudi offer to listing agent, not seller.

@Yasir Einaudi offer them something that is low cost to you but valued by others. One of my prior deals my agent offered access to an exclusive venue that he is a member of. It established a connection that paved the way to close the deal that had less competitive terms than the other offers.

@Akyl-Lateef Hewitt you have replies from solid QIs on your topic, though they have not advertised their services. I suggest contacting one of them to get going.