All Forum Posts by: Bill B.

I’ve had great luck with an ozone machine. Super cheap and no labor. Did it not work for you?

Dunn & Edward’s Nomadic Taupe. 

Your deduction won’t go up even if the value goes up. Your cost basis has already been set. A tax deduction today is worth more than one next year, assuming equal income each year. 

Your insurance could/should go down along with your property taxes so I’d tear it down. Unless you’re using why not limit your liability. 

Don't forget. That's the downside of the DST or even a syndication. They tell you when you're selling. 2 years from now when they sell you get to drop everything and find another 1031 exchange almost immediately.

Are you using a PM? How much work are you truly doing? I only have a dozen properties left. But with a PM during a bad month I might put in 2 hours. 30 minutes or less if more usual. 

1031 in to your dream retirement location in case it doesn’t work out as a rental 5-10 years from now and you’re forced to move in to it? Maybe a state without income taxes?  Good luck. 

Cody. Your example about year 5 isn’t profit it’s cash at closing at best. 

Using your example let’s pretend I pay $500k for a building and put down $200k. I sell the very next day for $500k minus the $300k I owe and $35k in closing costs. That doesn’t leave me a $165k profit ($500k-$300k-$35k=$165k) . It leaves me with a $35k loss. ($500k paid minus $35k selling costs = $465k... $465k Minus the $500k purchase price = $35k loss.)

using your math an all cash purchaser would have a massive 93% “profit” the second the made a purchase. 

I think a 2 flat is a duplex, is a 2 unit apartment building. Same with triplex and quad plex. Giving it a nickname doesn’t make it not a 2+ unit apartment building. 

Try 8-flat, double quad plex or 8 plex on for style. Sill a 2+ unit apartment building. :-)

Make sure you have NOTHING, no cash no assets. Otherwise you risk losing it all when you sign a year lease that's losing money every month. Or suddenly becomes illegal to do. Assuming you're in the 5% or less that don't lie to the landlord. (I don't know why any landlord would allow it as they'd have no tenant screening and no recourse if you stop paying, assuming you're VERY poor, as I suggest. Heck, they'll be lucky if their insurance policy is even in effect if they claim it's a LTR and someone gets hurt when it's a STR.) At least they can see your numbers and jack your rent up next year to "split the earnings" with you. By then you should have made enough to pay for the furnishing so if you have to quit your profit will be the garage sale value of the furnishings.

Can you imagine if you tried it in Vegas. And then AFTER you signed the lease you found out it's only legal while you're living in the unit. (Rent by the room only.) you goggles if I was legal and the answer is yes. Unless of course it's too close to an existing STR which again would result in losing everything. So again, having nothing and no "garnishable" wages is key.

You’d be WAY better off renting out rooms in a place you or friend, or your parent’s own.  Then you’re only out the cost of furnishings. Please try to house hack or literally anything else. Good luck. 

I did one in January. 25% down ($150k/$580k purchase), 7% interest with a balloon in 5 years, (shortest allowed by Dodd-frank). The problem is you’re competing with 5% guaranteed, pull your money at anytime offers from a bank. You’ve got a couple hurdles. You have to put 15-20% down or your seller will be upside down after paying closing costs if they have to exposes. If your seller is buying something else they’ll have to borrow every dollar you don’t give them at closing so you’ll have to pay a couple percent over their borrowing costs. 

It was an easy world when the banks were offering 0.1-1% and you offered 5% (4-5% better than the banks.) Now the bank is offer 5% and buyers want to offer 7-8% instead of 9-10%. So their offer is much less attractive. 

I think it’s just reverted to the world it inhabited for the 50+ years before 2010. Buyers with bad/no credit, high debt, or off the books income. 

They’re going to want between $1,000 and several thousand in fees before we even start talking interest. What can they take if you fail to pay that money? You’re offering zero collateral. If the deal gets dragged out or never closes, how do they force you to pay those fees/interest? What if the seller keeps the money because you miss a deadline?

It would probably be less than 1/2 as expensive to take a cash advance from your credit card or a title loan for a check cashing store. The reason the buyer is afraid you're wasting their time is because of wholesalers who don't even have EMD money. They truly are just wasting the seller's time.

If the LLC is doing what people say it does, limit your liability, you don't need n umbrella. All they can take is the property, so you get enough insurance to replace the property.

If on the other hand you've come to realize the LLC is useless because you are 10x more likely to do something personally to get sued than your property is. Not to mention you will obviously be personally sued along with your LLC. Then the easy solution would be to dissolve the LLC and get a personal umbrella. Which I HIGHLY recommend. Again. You are 10x more likely to kill someone with your car, or be sued over a dog, pool, accident on your primwry home than your rental is. And if that happens neither the LLC or the LLc having an umbrella will help.

Upside, your taxes become easier, your insurance may become cheaper, any refinancing will become MUCH easier AND cheaper. Weigh all that against an upside I just don’t see in keeping it.  

Good luck either way. 90%+ of us will never be sued, and 90% of those sued will be for less than a standard insurance policy covers. But it’s basically a “success tax”.