All Forum Posts by: Bill B.

@martinis Jackson

@dave foster

Hey Martinis,

You only have to reinvest 100% of the sales price if you wish to protect 100% of the “profits” (sales price minus purchase price, minus renovations costs minus sales costs, etc.) from taxes. Make sure it’s enough profits to make it worth the extra costs/hassles. 

But....

I included Dave above because he can confirm a thought I have in mind. I don’t believe you can exchange “flips”. These have to be investment properties.  You can buy it, fix it up, rent it out for awhile, then exchange it. But unless someone chimes in to say I’m off base I don’t think you can exchange a flip.  

-Bill

@neil Henderson is dead right. Google “Vegas woman fined $73,000 for air bnb “

If you’re going to do this long distance I wouldn’t really be considering short term rental in the first place.  Someone has to deal with 50-100 check ins check outs cleanings comp,aunts that must be dealt with TODAY for daily renters. 

You can run 10x SFR with a managment company and not spend 10 hours a month dealing with them. With q you probably wouldn't spend 10 hours a year.

In that example yes. But on the property I got a quote on it was 6% discount (profit) and 6% commission. I put in Zillow plus 10% and they accepted, high or low? I didn’t know. But a year later a realtor suggested the same price so my price was probably $20k high a year ago.  In your example opendoor woulda cost 3% or less. For that 3% I get a guaranteed buyer in 3-60 days, my choice. Probably worth $12k to many people. And since I over priced my property 10% I actually woulda done better with open door than realtor not gotten less, plus an infinitely better experience. 

What’s the shortest time period a realtor would guarantee a closed sale at list price? 

Ps. I Still didn’t take it because I thought 12% was too high for Vegas market. (It was listed as 6% commission and 6% “market adjustment”. I couldn’t figure out how Vegas red hot market was worth negative 6%. Turns out I was right. 

Ps. They offered a little more than offerpad and Zillow offers wasn’t up and running yet. 

ps. Sometimes investment property appraisals tack on an extra $100 or so for the property’s rental income estimation if they are going to count the property’s rental income towards helping you qualify for the loan. 

@Sundeep Bhatia

I AM NOT A CPA OR A LAWYER...now that’s out of the way...

1) I have heard of people getting away with calling it an expense if you had no choice to do it, it was a required expense. Especially if you paid this HOA not the suppliers.

2) if it’s a small amount, a couple thousand or less they’ve expensed it with the idea that the tax difference is too small to worry about. (A few hundred off your taxes this year or over 5-10 years depending on what it is.)

Proceed at your own peril but unless it’s a large amount don’t spend more time than it’s worth. 

@Jay Hinrichs

Sorry Jay. I’ve seen too many of your posts on here. I’m doing just fine with some rental houses and no builds, no loans, no GC friends, no private plane (though I did solo about 10 years ago.)   I’m guessing you’re doing me x 10.  If you’re buying a “poor man’s Tahoe”  it’s because you want to. For that matter cause you’re too lazy to build your own. :-). Guy like you, pry have someone build him a lake. 

Maybe I should get in that valley before Hinrichs drives the prices up. 

@Jay Hinrichs 

@Terry Lao

Hey guys, your comment about California overflow got me to thinking of the closest populations between Nevada and California. 

Did either of you ever look at Reno/Lake Tahoe? Or has the Nevada side basically become part of California at least price-wise? I’ve only been there a couple times and it was years ago but it was a nice break from Vegas. 

Most of my rentals are in Vegas but my only negative cash flow property is in MN on lake Mtka. Its negative $400/mo. But pays off $1500/mo on the loan, and shows a depreciation loss of $17,000/yr. When the loan is paid off in 12 more years it’ll cash flow about $2500/mo if I don’t live there. Oh yeah, it went up $50k in the last two years. But then I bought it so I could retire on the lake some day in the future and “knew” it would be unaffordable in the future. And maybe I get to write off some of my travel expenses. Long story short, if you don’t need the cash flow to live on, income is income whether you get it in cash or loan amortization.  

@kurt brumbaugh 

talk to the lender you think you will be using in the future. On a multi-family where you are obviously not going to inhabit every unit I believe you will get a percentage of the expected rent. (It will actually be part of the slightly more expensive appraisal. “Estimated rent”)  I don’t remember if you get 70% with experience or without. Without it might only be 50% but your lender will have actual written rules fo what they will do.

Hopefully @Dave Foster will chime in if I’m wrong but my understanding is you’ll be taxed on cash you keep or any lower balance mortgage you obtain. “Boot” so if you pay off a mortgage and get a smaller one you will pay tax on that difference a well as on the cash you keep.