All Forum Posts by: Will Barnard

MikeOh Wrote:

I am not an accountant either, but have spoke with mine several times on this subject. The actual purchase price is not the goverming determination of the depreciated value, but it can be used. The standard practice and the most precise would be to use the county's assessed value which is what the IRS sees on reported docs anyways. The assessed value will show the land and then the improvement value. Take that figure and then do the 27.5 year calculations mentioned before.

There is no question that RE is one of the greatest investment vehicles to wealth and income along the way.

That's true. I use ETC as well, and Jon has mentioned another company he uses (I forgot which one) that he states has lower fees. Doesn't hurt to shop around.
As far as advice from ETC, some things they can answer, however, since they are not tax attorneys or CPA's they can not answer for a 100% fact one way or another on some topics, particularly UBIT, UDFI, etc. So as it sits, our attorneys/cpa's must be consulted to verify IRS rules and guidelines.

If you are apt at finding and managing deals, you can bring in an equity partner. They put up the down payment and arrange bank finance and you locate, structure, and manage the deal for an agreed upon split. To utilize this strategy most effectively, use an entity, an LLC partnership is recommended for rental properties.

If you are looking at projects requiring rehab, you can take private money loans at set interest rates (similar to a HML) use their funds to rehab the project, then refinance and cash them out. This strategy may be a bit more difficult given our current lending crunch, but it still can be done.

Earned income such as w-2 employees, etc. are taxed at the highest of all tax rates by the IRS. Passive income such as rental income from a landlording business, is taxed at lower rates.

As Jon mentioned, consult with a CPA or tax attorney as they can direct you to the best format for your situation, plans, and goals. Also make sure your CPA/attorney is experienced in RE, as not all of them are.

Seems like multi-level marketing to me!

Thats what we are here for!

I believe it is even worse than that. From my understanding, the first two people you bring in to pay the $16,000, 1/2 your commission is split with the person who sold you the $16,000 education.

REI,

Thanks for the update. That is good information. I will send it on as well.
My credit union beats the rates, but not the LTV's. I am paying 4.25% on my HELOC up to 80% LTV.

In the example senario, the sfr is better from a standpoint that we look for $100 per door in cash flow. As mentioned by another post, the only negative on the sfr in this example is that a vacancy would be 100%.

The other item to look at is increased rents. By increasing the rent $25, you get $25 more on the sfr, but $50 on the duplex. If there is room to increase rents, the duplex may be better, so long as you can get it to $100 per door cash flow.

Credit unions are by far the best avenue for HELOCS these days. The rates are also the lowest compared to the large bank chains. Most will not lend above 80% LTV, so getting 90% will be very hard to find these days.

Josh,

New member "foreigninvestor" is posting the same question in 10 different threads.