All Forum Posts by: Brian M Sweeney

@Joe Lambert this is a great thought but could you imagine the tax code loop holes that would be used if this was possible? It would be an accountant nightmare. Just buy another building when the tax law changes and use cost segmentation to accelerate the amount of depreciation. By then hopefully cap rates will have risen. 

@John Pelaez so this wouldn't be the case. You would be grandfathered into the old provisions. That being said, they could change the way the profit or basis is taxed on that property when you go to sell. They may invoke ordinary income taxes, long term capital gains, etc. Obviously this is still all very up in the air. 

Hi @Alicia S. these are all very good questions. That being said, they are all going to be very specific to the type of property being purchased, financing used, rented, flipped, commercial, residential, etc. 

I would say that it is very important to know the entity structure that you plan to use from a tax & liability stand point before jumping into buying property. It can save you thousands on taxes as well as future liability problems. 

Most of the tax mistakes come from investors not having proper tax planning, bookkeeping, etc. They normally just have a tax preparer (which is basically just inputing the information). 85% of accountants just prepare taxes and don't actually find unique loop holes and ways to reduce the investors taxable income. I have seen numerous examples where the investor could have reduced their tax bill by 75-100k yet they ended up paying 20-25k in taxes. 

I am a semi new member to bigger pockets. I have been listening for years but now have an official account. I plan to add value and learn more about real estate and to provide insight on the tax laws surrounding real estate as well as financial planning. 

So the US Tax Code could be changed for the worse/better if they decide to due away with the 1031 exchange provision. I have used the provision many times but wanted to get everyones thoughts on the issue. The pro's and con's (which i see both).  What does the bigger pockets community think? 

I can assure you, unless this car wash is in the perfect location and is able to charge $15 per wash you may want to reconsider. They have large maintenance costs and the tax benefits on them are not that great. 

So this is a very interesting post because I happen to be a CFP/ investment advisor as well as owning an accounting firm. That being said, the model of financial advisory needs to change relative to the client. In most cases, none of my clients own more real estate than I do, which gives me the ability to advise them in multiple areas of their financial lives, including real estate. Most advisors that work for the bigger advisory firms are not being compensated for real estate advise, hence its not ordinarily in the best interest..Obviously there are cases where it would be. I tend to lean towards the advisors that are able to give advice on investments, retirement, real estate, taxes and business consulting. There isn't many out there that do all the above but they can be found. 

I really started diving deep into real estate investing 2 years ago from a post i read on google that was written by bigger pockets about how to 'trade up' real estate. 

I had started previously with a rental i bought my freshman year of college (2007) with the money my parents gave me for tuition. I kept that through out college and sold it after i graduated. It paid me $600/month cash flow. 

In the last two years i have bought, traded up, flipped, etc around 2 million in properties and currently own 22 units. I have used all of my own money but currently have none of my own in the deals (all bank money). It has been a great journey thus far!