All Forum Posts by: Bill B.

It would/could be only 15% capital gains tax and yes you could/would deduct all selling costs including commissions and transfer taxes. If you didn’t think $6k was worth it you might find it’s under $5k. And then if it costs you $1k per lot for 1031 exchange it might be under $4k. Even less if splitting the lots costs any real money. And that’s if you can’t find something to buy for under $100k or time multiple sales at once. 

Is there a local developer/builder who might be interested in the whole package? You might make less, but you cut a lot of costs, make the 1031 exchange easy and maybe worthwhile. 

Maybe the AI can keep you from calling people on the no call list and violating the law? Will they have to be auto programmed to hang up and never call again if so requested? That would be a great upgrade. I don’t see any other upside. It’s basically spam email for phone calls. At least most cell carriers will auto-block them. 

I assume it’s not high enough that you or any family members want to take on the job? Are there any similar surrounding buildings? Can you reach out to their owners and see what they’re doing? Next time it snows drive around looking for snow removal teams and reach out to them for pricing?

So their plan is follow Hawaii’s “protect the homeowners plan:  how did that work out?

Google says:
As of January 2, 2025, four homes had completed construction in Lahaina, Hawaii, after the August 2023 wildfires.However, rebuilding efforts are still ongoing

18 months and they’ve already built 4 homes. Nice…

You can’t offer less for a property full of fire rubble (lead and asbestos?)than when it had a mint condition 2000sf home on it? One that may not be rebuild able under current regulations. Seems weird. 
 
The government is trying to protect people who managed to run their life well enough to buy multi-million dollar homes? On the flip side, do they know how to find someone that will offer top dollar this week/month? They may have zero possessions left or a place to sleep. they cynical side of me says this does stop many well off people from taking the money and running. But it probably also slows down the rebuilding. It reminds me of the “ Cutting the red tape for the rebuilding period.” If it’s a good idea make it permanent? You’re pretty much admitting it’s not about safety. It’s about control and money. 
  
Anyway. I hope for all the best for those going through it. Either with kids and that additional stress. Or as singles and nobody to lean on. Yuck. 

@Nick Am

Depreciation is a ZERO % interest loan.  And you don’t have to pay it back when you sell, you do an exchange. I’ve probably depreciated $3M on my properties.  That means the government has been borrowing my $600k (instead of $1.2M because I don’t live in California.) interest free for more than 10 years. At 6% I’ve only saved $360k, but you would have saved $720k, an extra $72k/yr. That’s real money to many people. Why sell for 90% of the value after closing costs, minus taxes. When you can borrow 80% tax free and continue to collect the income?

Don’t forget, you get all the appreciation without paying taxes while it’s earned. (Thankfully the democrats unearned appreciation BS died.) And that appreciation earns you borrowing power. Within 5-10 years you should have been able to pull out your entire investment tax free and earn an infinite return. 

You don’t get to just expense the additional real expenses. You’re going to deduct your tax prep, your internet, your cellphone, your computer, your tablet, your mileage if you’re involved in the properties, your home office, etc etc. Imagine getting 20-40% off many things others have to buy with post tax $’s.

Don't forget that "stepped up basis" if you have any heirs. Leaving someone a 401k or an IRA is a horrible burden. They have to take it out within 10 years, add it to their regular income, and pay taxes at the highest bracket in their life. Leave them $2-$5-$10M in real estate and they get it all, tax free. It's like a ROTH on steroids with no contribution limits.

It’s a good plan, to me at least. I spent 5 years buying 5 primaries and 5 rentals. I used all the rent and any extra money towards paying them down. Of course back then we were getting “screwed” with 6-7% rates. Paid off the first 4 years later. Paid them all off within 10. 

Your plan works great. I ended up with 12 properties and 20k/mo in income after they were paid off. I spend less than an hour a month dealing with them. 

There are all kinds of plans and ways to “make it” in real estate. Don’t be distracted by people with other plans and ways. I don’t know of any camps of people more entrenched than the “cash flow is all that matters” and the “you must use leverage” people. 

I also don’t know how many thousands of members and opinions are on BP. But MAYBE 5-10 people on BP are in a situation anywhere near yours. (Available time, money, income, family situation, credit availability, time horizon, real estate market location and phase, medical situation, etc etc.) Certainly take advice from people who have done it before but their way isn’t the only way. 

I truly believe real estate is one of the most forgiving investments on the planet. Rent coming in and time solve almost all reasonable problems. Good luck. 

You can search this by clicking on the magnifying glass in the upper corner of the screen as it’s asked literally monthly if not weekly. 

TLDR: Quicken (quickbook’s little brother) is super easy, cheap, and still overkill for someone with less than 20 properties. It will auto download bank and credit card transactions, give you reports by account, category or property in any form you want. 

OTM = General, overhead/widescreen view of nationwide market tends.

BPRE = Detailed ways specific people are making money in real estate. Or even better problems they are facing others might face where the hosts weigh in with how they have or would have dealt with the problem. 

To me:  

OTM is an entertaining news show when it’s Kathy, Dave, Henry, and James discussing headlines. And an interesting take on markets when they discuss them. Dave solo discussing the opinions in other articles is decent.  And I struggle through the expert interviews. 

BPRE: is great when it’s problem solving and good when deep diving on a strategy. The episodes I struggle on there are the interviews that seem to be either someone the host wants on, or that they were on their show and it’s a reciprocal situation to build an audience. (The people running 500+ units or $100m syndications when the average BP listener (I assume) has 1-10 units and is worth $1-5M.). I listen to the problem solving episodes for the same reasons I read forum posts. To learn how to solve a relatable problem. 

Now I’m sure BP has all the data and statistics to so h the know better than me what people like and want to hear. Plus I just hit “Mark as played.” Anything I find useless, so they don’t need to chase me. 

I only listen to 2 x car podcasts, 2 money podcasts and 6 real estate podcasts. (These are 2 of the shows I listen to, so you’re capturing much of the market.)

Thanks for all the effort either way. 

1) are you paying down more than $400, if so you are making money, but if you put down a large downpayment you’re not getting a good return m

2) do an amortization table at 30 years. If that covers the $400 I think you’r ahead. It’s like you bought the properties with a 30 year loan and are putting the rest in to a savings account. I assume you got a better interest rate, and I know you are saving a boatload of interest. 

3) imagine year 11-30 where you are cash flowing thousands with paid off properties instead of hundreds because of these lean 10 years. 

4) hopefully you can raise rents at least $100 each every year and in 2 years your cash flow neutral even with preferred short term mortgage. 

Don’t forget. You’d also make all future capital gains at least partially taxable instead of tax exempt by converting your primary to a rental. Even if it is for just 2 years. This could easily cost you $10’s of thousands if you plan to stay in the home 5+ years when you return.