All Forum Posts by: David M.

@Allan Smith

I thought 1031 exchanges only defers depreciation recapture... won’t directly help with taxation categorization of profits..

@Mike Chira

Doing fix and flips basically makes you a Real Eastate Dealer, not. RE Investor. As a dealer, profits on fix and flips are active income... so it’s an entirely different ballgame.

I heard some very interesting approach to use C Corp, whethe a Corp or a LLC taxed as C Corp. with the recent decrease in corporate taxes, it makes a lot of sense. You avoid double taxation by taking salary and no dividends. Meanwhile, you are taxed overalls at a lower rate, 21%

It’s a complicated matter.

@Colton Potter

Must be a Canadian thing.. no way could I get away with laminate countertops on a remodel. If the cabinets are in good shape, yes, refinishing could be passable. Otherwise, you are generally going to need new cabinets

Just my perespective from my market

@Mike Cumbie

@russel Brazil

FYI: MLS systems are not always owned by Realtors. In NJ most are privately/commercially owned. But you still need to be a Realtor to get an account.

You can "opt out" as long as it's an exclusive to my understanding. Think of it this way: does it make sense for realtors to advertise a property on Zillow but NOT the MLS? That's what has been happening. The hard salesman realtors generate interest that way to keep the days on market number low when they do list on their MLS since sales talk has basically created a stigma around listings which haven't moved. Another example of sales talk basically backfiring on itself

I believe NAR's argument in their anti-trust type defenses has been the effective open market that the MLS create and broker cooperation. But, with Realtors marketing off the MLS, that breaks the system.

NB. Not necessarily making an argument for or against, but trying to clear up what I have been reading here

@Lijuan Wei

You can file adjusted returns for the past three years as I recall...

@Quan Booker

Not sure I understand.

But, if you have the credit availability to do what you want, you should be able to do a multiple refinance. It was many years ago, but I did consolidation by refinancing three loans on three properties into two loans on two properties. We “simultaneously” closed on the two new loans and most of the proceeds went to pay off the three loans out of closing.

Are you trying to do something like this?

@Jay Clegg

Hmmm... How close of a family friend is this?  In California, my understanding is your tax assessments are based on your purchase prices and your tax rates are fixed.  This is what got California in trouble during the crash.  Are you buying cash?  If so, why not sell it for low price and deal with the difference between the two of you?  You'll need to run numbers (and I'm not sure of your strategy) to see whether its better for you to have a lower real estate tax vice having to pay a higher capital gain later.  Plus, your depreciation will be lower.  Just an idea...

She wants cash flow you say...  What about seller financing?  You just pay her monthly.  Or, an installment sale which may let her be more tax efficient.  If this is a friendly deal, that are tons of way for you two to maximize the benefits.

Ask to meet the tenants -- i like to know who I'm renting to.  If they work for you, don't forget to take over the lease or I guess renew in this case.  Also, make sure the tenants know another investor is buying the property.  Too many times I've heard of single family investment properties turning over and the tenants, who are happy to live there, leave not knowing another investor is buying.

Obligatory Disclaimer:  I am neither a lawyer or CPA, and you really should obtain professional advice focused on your situation and needs.

@Leon Lee

Double ending the deal means the real estate agent is serving as both the buyer and seller agent. They have “both ends” of the deal. As a result, there isn’t many cooperating commission they have to share with another agent—basically what you hear about having to split commissions.

According the National Association of Realtors Code of Ethics, Realtors are not supposed to push for these deals unless it’s in your best interest. Think about it, what agent wouldn’t love to make ~twice the commission for a single transaction. Don’t forget, the broker gets to keep “twice the commission” as well. That’s why they push for selling their own inventory.

Dual agency might give you better service, but you might be missing out on other, perhaps better, deals

@Sue Gyure

I’m not a cpa but do my own taxes for rentals. I’m not sure I understand your question. Where are you going to put the expenses separately?

Or let’s just think of it this way: short term capital gains are taxed as ordinary income. So whether you try to offset your SchD or 1040 via SchE it doesn’t really matter. You just need to have income or capital gains to offset against.

Does that help?

@Jay Clegg

I don’t know how real estate works in California (I’m licensed in NJ), but that just sounds like you are doing a private sale. Since you two have connected without a real estate broker/agent, save the commission but you have to do the legwork yourself.

Other being boiler plate to have an attorney, it’s still good if you have to change something in the contract (since that’s practicing law) and just in case something happens, you have an advocate on your side to help you through it, especially since you don’t have a real estate agent to guide you.

Sorry I don’t have any California specific advice. Good luck