All Forum Posts by: Aron Rodriguez

Hello all, I am currently renovating my rental property in Glendale, AZ that I purchased in May 2022.
My property will be in service mid-September of this year.
I am looking for any information and advice on how I can use 100% bonus depreciation for tax benefits this year. I am also looking for CPAs that can help me take advantage of this tax strategy. 

Thank you,

Aron

Quote from @Karen Margrave:

Everyone seems to always do LLCs, however; what about S Corps? I'm not up to speed on all of this, and thus why I always recommend talking to an attorney or CPA that knows what they're doing, the most recent laws, and your specific circumstances. 

I don't think we are doing an LLC just yet. We will start off with an operating agreement written by our lawyer. We've already listed our strengths and weaknesses, goals with this property, and exit strategies. 

Quote from @Jim Pellerin:

Quote from @Aron Rodriguez:

Hello all, I found this great deal and going in 50/50 with a trusted friend. 425k offer with an ARV of 600k based on sold comps within 3 months. The challenge on this property is an unpermitted room in the garage and kitchen/dining room renovations.

How did you structure your partnerships and how did you set up a legal partnership agreement? Any information on this is much appreciated. Thank you.

 Are you flipping or holding?

We are holding.

Quote from @Chris Seveney:

@Aron Rodriguez

Form LLC with both of you 50/50. Any attorney can do this. As mentioned this is often discussed here on BP

Thank you Chris!

Quote from @Karen Margrave:

If you do a search of the forums, this question has been asked a zillion times, so you can find various answers. Whatever you end up doing, make sure everything is in writing, know who is going to put in specific amounts of money, who will do what, what happens if things go over budget, how any profits are split, etc. Once completed, what happens, are you hold for LTR, selling? If it doesn't sell, what then? Have an attorney draw it up so there's no stone left unturned. Friendships fall by the wayside on bad deals. Good luck. 

Thank you for the tip!

Hello all, I found this great deal and going in 50/50 with a trusted friend. 425k offer with an ARV of 600k based on sold comps within 3 months. The challenge on this property is an unpermitted room in the garage and kitchen/dining room renovations.

How did you structure your partnerships and how did you set up a legal partnership agreement? Any information on this is much appreciated. Thank you.

Quote from @Nicholas Aiola:

@Aron Rodriguez If you place the property in service in 2022, you will be able to take bonus depreciation on eligible assets. If the property is not placed in service until next year, there will be no rental deductions available to you this year.

 Thanks for the info! I'll be doing my tax homework. 

Investment Info:

Single-family residence buy & hold investment in Riverside.

Purchase price: $565,000
Cash invested: $40,000

House Hack! VA home loan on 2.25% with 0% down

How did you find this deal and how did you negotiate it?

MLS 1 hour after listing.

How did you add value to the deal?

Kitchen and dining room renovation.

Lessons learned? Challenges?

Don't give up!

Quote from @Nicholas Aiola:

Hey, guys!

I've been on BP for about 7 months now and I have quickly learned two things:

1. There is no better place than BP to talk real estate
2. The wealth of information on BP is immeasurable

I've read and learned quite a lot while scrolling through this site, and figured I'd create an open forum to (hopefully) offer some help and advice back to the BP community.

I'm a CPA in New York with a passion for real estate and I'd be happy to answer any tax questions I can!

 Hey Nicholas, thank you for this open forum! 

I just bought my first rental property in Phoenix, AZ in May 2022 and currently improving and renovating the property; bathrooms, flooring from tile to LVPs, recessed lighting, paint, and new kitchen cabinets and countertops. Will I be able to use the 100% bonus appreciation for this property even if it has not been rented yet? Thank you! -Aron

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $565,000
Cash invested: $25,000

House Hack! VA home loan on 2.25% with 0% down. 25k on kitchen, dining room, and recessed lighting.
Now worth roughly 650k conservatively, not including the ARV.
Currently house hacking the 2nd floor of our split home to a traveler nurse.
Rent from tenant cuts our mortgage in half.
Repeat the process by next year of 2023 for another house hack.
Property will be run as MTR/STR and will cash flow about 1k/month.

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

Perfect home for a primary residence in a quiet neighborhood in Riverside.

How did you find this deal and how did you negotiate it?

I found this property an hour after it was listed and immediately sent the listing to my agent. I was able to tour the property the next 2 hours. My fiancé and I sent the original owners a letter, offered 25k over asking price during a frenzy in the market. We were first denied due to a cash offer but went under contract a week later. Appraisal came back 20k over purchase price. Great deal!

How did you finance this deal?

VA Home Loan

How did you add value to the deal?

Renovated the kitchen, dining room, recessed lights, paint. We are planning on renovating the rest before 2023.

What was the outcome?

Happy homeowners!

Lessons learned? Challenges?

DO NOT GIVE UP. I had been looking at properties for about a year before we got this property. When you're about ready to give up, push a littler harder and great things will come your way.