All Forum Posts by: Benjamin Noblitt

Quote from @Carlos Ptriawan:

Quote from @Benjamin Noblitt:

Hi everyone,

I am a newbie here, and I am trying to learn as much as possible right now. I have been thinking about a good strategy for me to start off since I already own a home. I would love to see what you guys think of my proposed scenario below:

Step 1) I bought my first house using FHA with 5% down in November of 2021

Step 2) I plan to live in the house for 2 years 

Step 3) I buy a new primary residence with another FHA loan at the 2 year mark (November of 2023)

Step 4) STR the first house for 2 years

Step 5) Get a cost segregation analysis to write off as much as I can with accelerated depreciation (using the STR "loophole")

Step 6) Sell house either with a 1031 to avoid taxes, OR sell house outright and get tax free $250k from capital gains.

Step 7) repeat process every 2 to 3 years

Please chime in with any guidance or help! Thanks in advance.

 Forget step #5 that doesnt apply to you.

What you can do, lets say your buying power is $100k.
you buy 2 house on same zip code with 50k each, one primary one rental. 
After 5-8 years (2 years is too fast), move to other house, and vice versa.
If appreciation rate is similar like in 2010-2020 era, you will 100% paid-off a 30YFRM within 10-16 years, depending on the appreciation rate.

Utilize 1031 and 121 carefully. Create a PAL. Do Flip.

This is the way I build equity building where I can paid-off 30YFRM in 10 years only. 
If I only purchase one home than my appreciation is limited.

Even better, if you have another 50k, buy in the midwest for cashflow basically to pay off the mortgage.

Thanks for the insight. I am learning here and have a few questions
1) Why do you say a cost seg would not apply to me?
2) May I ask why 2 years to too fast?
3) I am not sure I understand how an increase in appreciation would allow you to pay off a FRM in a shorter time period, could you help me learn more about this?

Sorry for all of the questions!

Ok, I did not know that the $250 does not apply to depreciated amounts, I was assuming that it did. In this case, the better option would be to 1031 to avoid the whole issue anyway. Thank you for the help!

Thanks for the response Dave. I guess my thought of it being a somewhat unique strategy just went out the window haha. So much to learn. 

I have heard that a primary residence is not the best rental. My thought is that I just need to make the best of the scenario for now since I already own the place.

I am not sure I follow what you mean by recapture the depreciation. Are you saying that the $250K capital gains won't apply after using a cost seg? My assumption is that the market is NOT going to appreciate substantially over the next few years here in the PBW. Because of this, I won't likely hit that $250k number anytime soon. However, if I was able to depreciate the building and use that to shield my income and at the same time allow for me to report capital gains, I could use the $250k allotment as well, no?

Thank you for the insight! I will have to ask my loan officer what the cost to covert to a conventional would be. Looks like I would need to do this regardless of my plan.

Since home prices are so close to what they were when I bought the house, I’m curious what I would be able to get coverage for. Either way, I’ll ask my loan officer.

Any thoughts on the rest of the plan?

Hi everyone,

I am a newbie here, and I am trying to learn as much as possible right now. I have been thinking about a good strategy for me to start off since I already own a home. I would love to see what you guys think of my proposed scenario below:

Step 1) I bought my first house using FHA with 5% down in November of 2021

Step 2) I plan to live in the house for 2 years 

Step 3) I buy a new primary residence with another FHA loan at the 2 year mark (November of 2023)

Step 4) STR the first house for 2 years

Step 5) Get a cost segregation analysis to write off as much as I can with accelerated depreciation (using the STR "loophole")

Step 6) Sell house either with a 1031 to avoid taxes, OR sell house outright and get tax free $250k from capital gains.

Step 7) repeat process every 2 to 3 years

Please chime in with any guidance or help! Thanks in advance.

Hey everyone, I spent some time searching but could not find an answer to this. Separate from my investing goals, I am looking to buy a piece of commercial property for a small business that I would be looking to start up. I have spoken to a commercial real estate agent and they are wanting me to sign an agency agreement. They have indicated that an agency agreement is required, but I cannot find any laws requiring it. Here is my question: Is it common for commercial real estate agents to require an agency agreement in Washington state?

As a newbie, do these rules apply to Seattle city limits or do they extend county or even statewide?

Originally posted by @Manju Nat:

Update: I got out of this deal and bought a duplex instead. Thanks everyone for your valuable inputs!

What was the ultimate reason you left the property? Was it because of the noise issue? 

@Haley Anderson - Great! Let me know the details!

Any news on an upcoming event? I would love to attend one if they are still ongoing