All Forum Posts by: Clarke Wegener

@Matt J. Thanks for the congrats! BP helped a lot on this deal even though I've only been on here for a little over a month. I've been BRRRing all along but didn't realize it. Now that I see there's an actual system to follow I refinanced one of my existing properties to pay for the next two. So getting one mortgage on a property I already own instead of two on new purchases went much easier with the bank and also cut my closing cost in half! Good luck man! 

Oh yeah, @Logan Allec and @Linda Weygant thank you for the real estate professionals refresher. I had an 18 month hiatus from the W2 job so I was able to claim RE professional. It really didn't help in my current situation. Maybe it would after I'm married but even that now has been overcome by other information. Thanks again.

@Linda Weygant Thanks for the great input! You made some great points that haven't been discussed yet. I was headed down the C Corp road until I did a little more research. As you said, it's not as easy as just using your earned income from an employer as contributed capital. I miss read somewhere that you could deduct the contributed capital and just take a dividend payout low enough to not cause double taxation. Wouldn't that be great! Thanks for the bit about carrying the passive losses indefinitely! I was thinking I could only carry forward a few years. And being able to offset the gain from a sale is huge. That must be because the gain is still considered passive income? I'll definitely add that to my strategy. 

SOOOooo BP....I don't see any reason in my situation to not marry the love of my life! I don't ever see having more passive loss than passive income so I won't lose my deductions. Also, if my losses happen to be higher than my passive income I'll carry them forward which works very well for my exit strategy! The answer was much simpler than I had imagined. Amazing forum contributors! Thank you all very much!

@Logan Allec I definitely actively manage my 7 properties but the 750 hour requirement is hard to hit. I'm recording my hours this year so we'll see. Does being a professional help my tax situation in regard to being over the $150k earned income threshold we're discussing here?

Well I read the tax and legal playbook. It's pretty elementary in its actual advice but from what I've gathered the C Corp route is just too much hassle for limited gain. I think the best route is is to establish enough passive income that your passive losses will never be greater. That's my current position and the strategy I'll keep in mind going forward with my investments. No matter your W2 income you can always use passive losses to offset your passive income. Any losses over your passive income cannot be used to offset W2 income once you reach the $150k W2 income level. I'd be interested to hear if what I've said hear is correct or not.

Hi @James Free,

I'm going to assume from your question you're just starting out and I'll answer based purely on my own experience. I always use mortgages and now in hind site I can see the benefit of starting that way. Use a local institution. A small bank or preferably a credit union. Get all the money you can from them on your first deal. Use half your money to rehab. That leaves the other half to purchase your second deal while the first is seasoning. Use credit cards, first deals rent and your day jobs wages to rehab the second deal. After all that use the two rents to hammer that mortgage down. Now when you go back to the bank you look like you know what you're doing. They'll be dying to give you money. This way you're  building your resume so to speak and building a relationship with the bank which lowers your risk profile in their eyes. Million ways to go about it but that has worked for me. Good luck!

Great topic? I was just thinking about asking the same question. Looking forward to the responses.

@Tanya H. Hi Tanya! I haven't upgraded my membership here yet so I think my direct communication is limited. I will do that soon. I love to help any way I can and also learn about your experience with multi-state. I know Bay City very well so just let me know what you need.

@Sean Walton We were wondering about filing separately. I just thought it would be a nightmare moving deductions and income back and forth on the individual returns to see where the largest benefit lies. @Alan Grobmeier I get the concept of deferring the taxes by maxing the 401k. It's the part about deferring the income also that's hard to take. I really like the idea of organizing a management company under a C Corp and piling all our W2 income into the corp. I'm going to do more research and consult a profession on that concept. I'll be sure to let the BP community know what I find out.

oh man! All great advice! Thank you so much! I read about the C Corp structure on here before but lost the thread. I'm ordering that book today! Also, great news on still offsetting my passive income with passive losses no matter the level of my ordinary income. My rents are high enough now that I'm buying more property to rehab just so I can offset the rental income. Thanks again, BP really pulled through for me on this one!