All Forum Posts by: Bonnie Griffin Kaake

@Robel Nessro  Many young people are buying houses and then having roommates to help pay the bills. Another good thing about that is that you can do a cost segregation study based on the percentage of the house that is being rented to your house mates. This would end up getting you some tax benefits and extra cash flow that could help you leverage that into another property...maybe a 1031 exchange. Or, you could move out and leave this first purchase as a rental and buy another.

@Kevin Stearns  I can help you with tax strategy and tax benefits and cash flow through cost segregation, 179D, R&D, and the benefits of ECO construction using Green Zip Tape. LEEDS credits may also be available on some of the projects you mention. I am a real estate broker (license is inactive), investor in commercial, industrial and some residential rentals. I currently am an expert on tax benefits and cash flow available to investors in commercial and residential rentals with CSSI, a national company. We provide services in all 50 states and use engineering-based studies. Estimates and consulting are at no cost. 

@Tayvion Payton  The biggest lesson I learned in my industrial property and retail property investments was to pay close attention to the tax benefits available on a property. I left a lot of money on the table because my CPA was not familiar with accelerated depreciation at the time. I now work in the field of tax benefits and cash flow for owners of commercial properties and residential rentals for purchases of $250K to over $2.5 Billion. 

I recommend you get a pre-analysis on the tax benefits available to you on a particular property either as soon as you identify a property or once you have closed on it. On the size property you will be looking at, you can expect about 6 to 8% of your purchase price in upfront tax benefits that will help you do any renovations you need to do or invest in another property. If you need more information, let me know. 

@Cliff Benner and @Mitchell Gunlock  The very best place to find RV parks for sale are at trade shows. I exhibit and talk at them about available tax benefits and cash flow that too many miss. At the last show I attended, our booth was directly across from a RE broker of RV Parks. Let me know if I can be of help. 

Quote from @Matthew Drouin:

@Bonnie Griffin Kaake all of those will be on the table and be rigorously discussed as we chart our way forward.  I'm friends with one of your colleagues at CSSI Brenda Reding.  You guys are the best!

That is good to hear. Too many investors are not aware of the tax benefits and extra cash flow that could be theirs. Thank you for your kind words, Matthew. I am sure Brenda will do a great job for you. 

@Michael Doherty and @Mike Auerbach and @Ellen Steele Don't forget the additional tax benefits available with cost segregation on the new basis as well as 179D. The 179D benefits can be available if this is a commercial building you are exchanging into. 

@Matthew Drouin Are you aware of the tax benefits and cash flow opportunities with 179D and the use of Green Zip Tape as well as cost segregation on this build-out? This could save you as much or more than 10% to 17% of your (purchase price plus construction costs) up front. Let's talk if you want more information. You may not have to jump through the hoops you have been jumping through to get the results you want. 

Quote from @Marcus Auerbach:

Getting a FincenID makes it easy if you have more than one or expect future updates. 

I don't quite understand the pushback. 

It blows my mind that you can actually start and operate a legitimate business in the US without telling the government (not the public) the name and address of the owner. I mean, how shady is it to object to that? Do you object to giving them DMV your address Or your bank?

I understand some of the issues and I believe those can be adjusted to be sure we are not penalizing some of the small investors. On the other hand, if you ever had a spouse or ex-spouse who was hiding assets in LLCs you might understand the need for more transparency in these transactions. Then again, maybe that is why some investors don't want this level of transparency.

I am not sure what state @Camille T. lives in but I don't know of a state that currently has this level of transparency. Years ago as a commercial RE broker, I once had a client try to close on a commercial property using cash. He had to go to a bank and get a cashiers check. The title company would not accept cash. Money laundering is a big concern and needs to be addressed. 

Quote from @Todd Foust:

*Advice. 

Hey team,

I have a unique combination of tax situations, and I am trying to identify an appropriate CPA. Here is my issue: 

- I live in South Carolina

- My W2 and primary income is from company in North Carolina

- I'm starting a real estate rental business in Illinois

I started looking for CPAs to help and figured I'd start with accountants in South Carolina but so far everyone I contacted simply responded with "not taking new clients". I wonder if that is a graceful way of saying I cannot help you with your taxes in Illinois as I'm only license in South Carolina?

Questions

1. In order to get a CPA, would they need to be licensed in all three states in order to help me both with Personal and Business taxes/accounting needs? If this is a requirement, feels like odds would be low to find a match? 

2. Should I instead just try to land an accountant in Illinois and JUST ask them to do the accounting and taxes for the business only, then I'll just tackle the personal taxes like I have always done? 

3. Third idea was to see if TurboTax may still be able to tackle my scenario. Anyone use TurboTax to help manage the business taxes and returns, depreciations, tax benefits etc? 

Thanks for any advice or experience you can share. 

-Todd

 I would not recommend trying to use Turbo Tax for your situation. What is more important is that you find a CPA/EA/tax professional who is savvy about real estate investments. Then, work with a tax benefits and cash flow strategist to maximize your benefits for investment real estate. You don't need someone in your own state now-a-days. Tax professionals who are savvy about investments in RE are far and few between. There are simply not enough graduates choosing to be CPAs/EAs/tax professionals. There are some good ones on BP as well as those of us who are tax strategists who can maximize your tax benefits and increase your cash flow. We work with your tax professionals to your benefit. 

 @Eric Carlstrom

Regarding taxes, be sure you are not paying too much and that your CPA/tax professional is up-to-date on the regulations. I see too many depreciation schedules done on 27.5 day depreciation schedules for STRs. This is a red flag for the IRS. All short-term rentals of less than an average of 30 days per year belong on 39 year depreciation schedules.

You can only occupy your STR 14 days per year and not more than 10% of the actual rental days by tenants. You may be better off renting another property for your own vacation stay than staying in yours; why put up a red flag for the IRS?

There is another tax benefit you may not be leveraging. Get a no-cost estimate for an engineering-based cost segregation study on every investment property you own over $250K in purchase price. You are likely leaving thousands of dollars in tax benefits and cash flow on the table. I am available if you have questions or need a study.