All Forum Posts by: Bruce W.

@Mike M. The PHX MSA is still working its way out of the hole it fell into after housing there crashed exceptionally hard after the bubble burst. The recovery has been slow there. You just bought at the right time, which is a fundamental requirement when buying any asset. If you had bought the stock market in 2009 you would have doubled your money, or even more IDK. Your not so humble brag post just points out the "buy low-sell high" maxim which has been widely known for centuries.

Be aware the minimum cost for an LLC in CA is $800 per year. CA LLC tax + fee table

I had a big umbrella insurance policy instead of LLC when we actively invested here. I no longer invest in CA because the state is not very friendly to business, with taxes, fees and regulations.

Nolo Press NOLO Press webpage has helpful guides to open an LLC, or, more importantly, help you understand the landlord rights and responsibilities for rental properties.

Good fortune to you!

You can get a cheap financial calculator or download an app to do the mortgage calculations needed to answer this question. I did the math and here's what I found:

mortgage amount = 112500

monthly PI payment at 4.5% = 570.02

monthly PI payment at 3.85% = 527.41

difference is $42.61 per month.

Dividing your points amount ($2250) by the difference yields just under 53 months.

If you keep the mortgage for 53 months or more, paying points will save you money.

There may also be some taxation concerns considering the deductibility of points, but I don't have that info.

Thanks Priyanshu, but that doesn't really help. Here's a direct quote from this page: 

"We are going to eliminate most of the tax breaks that mainly benefit high-income individuals. Home ownership, charitable giving, and retirement savings will be protected – but other tax benefits will be eliminated."

That clearly says that the mortgage interest tax deduction for homeowners is protected in the new plan and much of NAR's release seems to miss this fact.

I'm glad NAR is active here, but am mostly concerned with the 1031, which is only mentioned in passing in NAR's release.

There have been many rumors from various sources recently about limiting the 1031 tax-deferred exchange. Now we see that the President wants to eliminate all tax deductions, except for mortgage interest and charitable contributions. His plan also says they want to remove any tax deductions which benefit primarily the rich. Reading between the lines, I think this spells doom for the 1031 tax-deferred exchange.

Now I'm not rich, but I have made use of the 1031 tax-deferred exchange and my investment plan relies on it to limit capital gain taxes and depreciation recapture and provide for my heirs. The 1031 increases real estate investment activity which is a good thing for the entire country, not just a few rich investors. The jobs and capital flow which result from building, buying and selling real estate stimulate the entire economy, especially during the last decade when it really needed stimulation which didn't come from government spending. You may argue that tax cuts ARE government spending, but this is illogical to me, because the earnings are the investor's to begin with, not the government's and the government doesn't earn anything. And it's not a particularly good steward of our tax dollars either, if you ask me.

Going one step further, the Fed's zero-interest rate policy (ZIRP) has penalized savers and bond investors by denying them a real return. If someone was looking for an alternative investment providing a reasonable rate of return which was safe and kept pace with inflation, real estate was the only game in town. Now the government just can't stand all this potential tax money they are missing out on. They want their "fair share" and this policy adds insult to injury to creative investors who are seeking to safeguard their savings in alternative investments.

If you're interested in saving the 1031 tax-deferred exchange from government raiders, I urge all of you to browse to http://www.savethe1031.org/ so that you can quickly and easily make your wishes known to your elected representatives.

Thank you and good investing,
B

With RadioShack intending to close 1100 stores, I began to wonder about the leaseholders on the affected property. In my residential real estate business, I am allowed by law to withhold a "reasonable" amount from the deposit to make up for lost rent while I am looking for another tenant. I typically cannot require payments to extend for the entire remaining term. What options exist for leaseholders of commercial property in cases where the lessee exits early?

I'm planning to exchange my rental property, possibly for a DST commercial property. My current property is owned with my wife as JTWROS. I'm planning to create a living trust and transferring the property into it before the exchange.

Are there any issues with entering the DST with a living trust?

Is there a minimum time limit that my current property should be in the living trust before exchanging it?

Thanks,
Bruce

I just checked out Rentometer.com. The results are based on a general geographical search, so don't consider the particular property at all. This may be good, or it may be bad, depending on your property.

I have used Craigslist searches for rental comps. This is good, because you can narrow your search down to pertain more directly to your property.

In general, I underprice my property by $50-$100 in order to get a larger pool of applicants. Heed the advice on BP about tenant screening - you cannot be too careful!

Good investing.

Karen, was I naughty? The tone of your post makes me think I did something wrong. We can't all be the big fish, sorry if I shouldn't be in your pond.

I've been thinking about doing this as well. Found some books at the public library used book store or Goodwill store for 50 cents apiece. I realize I must still take the courses to qualify for the exam, but here's my real issue

$60 Exam fee (one-time)
$49 fingerprint fee (one-time)
$245 license fee (annually)

This is costly enough to make me ask if it's really worth it. Then there's the whole hook up with a broker deal to actually get access to MLS. Will the broker have sales expectations for me? How much will my seat with the broker cost?

Can you guys explain how it works and how you justify the costs?

Thanks,
Bruce