All Forum Posts by: Bill B.

I’ve done a couple 5 year leases, a 7 year and a 10 year. You have to be really comfortable with the tenants to go long but it’s worked out well for me. What you lose out in rent increases you more than make up for in avoiding vacancy, commissions, and make ready repairs.

Maybe agree to that 3-5-7 year how ever long with the understanding that you each have the right to cancel it after a year if it’s the working out for you? or each of you is willing to pay a “cancellation fee” that goes down every month. (I’ll give you $1,000 if want you out a year from now or you pay me $1,000 to cancel in a year. $500 between 1-2 years? Dunno, I’m winging that part of it.)

You can certainly ask. As long as you’re willing to lose the deal over it, ask away. (The second you send an amendment to the deal saying “our offer is now this price after you fix the insulation.” The seller can say no thank you I have this better offer over here, goodbye. Until you send that amendment the seller is stuck with you.)

If those numbers are all net. MOST, if not all, people are taxed 25% on the depreciation recapture (the $50k you depreciated) and then the other $100k ($200k - $100k) is taxed at your capital gains rate. (OFTEN around 15%)

So about $27,500 in taxes due...

That financial planner should have any certifications taken away and their clients warned. Either they are “teaching” clients about something they don’t have a clue about or they are out right lying in a way that will cost their clients thousands of dollars. 

You have to pay depreciation recapture even if you never claimed it. You are literally giving money away. 

Any mortgage interest limits would be solely on your primary residence, nothing at all to do with rentals. 

This being the case I assume any new loan won’t qualify. 

The taxes HAVE to be wrong. The property is selling/worth $90k and the taxes are $7400? (More than 8% per year?)

I have a $640k property in MN where the taxes are $5500 and a bunch of $300k properties in Vegas where the taxes are under $2200.  (less than 1% per year)

If you are leaving the city I would sell. Mostly because of the tax free appreciation. (Assuming over $100k of the $325k is appreciation.) 

If you are staying in the city and the appreciation is over $150k I would sell. (You’d have to make $22k in rental profit just to equal the tax savings.)

If the appreciation is under $50k and you’re staying in the city, keep it. People are buying the equivalent of $325k properties for $1800 in rent all the time, and this is a property you know. If you need the money or are mentally tied up on the equity not earning enough take out a home equity loan or refinance it. But only if you need the money or can’t stand to have the equity tied up. 

I can't speak to Vegas MFR rents, but rents for SFR have actually increased in Vegas before during and after the recession. And those increases actually accelerated during the recession. I raised rents almost 10% yearly from 2008-2013. Rent growth has since dropped back down to about 5-7%, about the same as before the recession.

Cashflow skyrocketed in Vegas during the recession (at least in my market, NW valley SFR) as people who had recently, or perhaps only, ever lived in houses had zero interest in renting an apartment. They wanted yards, garages and in unit laundry.

But like Dan mention on his duplex my ROE is dropping like a rock as the equity increases. 

Below is how wacky the numbers can get. Which numbers are good and which are bad?

Not once did I hear a timeline over 2 years when these predictions were being made daily in 2008 and 2009. You can’t say something that happened 10 years later stalled a prediction. You’re left with two possibilities  they were wrong or they were deceitful  I’m pretty sure if they KNEW the MASSIVE INFLATION (their words) wasn’t going to happen for 10 more years, a couple presidential elections and congresses later, they would have said so.

Saying you were early when you “Predicted” something that will certainly happen sometime in the future is no predicting and certainly isn’t helpful, maybe even harmful. 

I predict there will be another major war! You should worry  

I predict the US will face massive damage from a hurricane! Worry worry worry  

I predict a world leader will be assassinated!  plan plan plan  

“Predicting” something has to come with a timeline, or as any smart predictor knows, one will be assumed. And by default the predictor accepts that timeline or is being deceitful. 

How many years from today can his “prediction” still be right? Does it have to be the next recession? Or can it be 3 recessions from now and he was still just early?

How many years from now will he apologize to the people he talked out of the massive stock market rally and into a money losing gold investment?

Is he the same clown that predicted MASSIVE inflation every day on every podcast and in every interview for the first 3 years after the recession because of the stimulus  package? Over and over and over. Or the guy hyping gold was going to $10,000/oz? Or both?

If he was, he wasn’t alone. Some of those guys from 2008-2012 owe MASSIVE apologies, or at least an acknowledgement that they were wrong again.