All Forum Posts by: Henry Clark

OP you said “we”?  

So 5 years for you to retire?  How long for your spouse or partner?  Joint tax return?  

The purpose of the above questions will be evident below.

1.   Take advantage of the Capital Gain deduction of $250,000 in primary residence per “spouse”.   

2.  Now do the above again.  Takes far fewer doors to make money when you’re not being taxed.  
  
3. Sale your current house. Buy a second house as a primary . Pick one with value add potential. Either an easy ADU. Example take a 3/1 to a 3/2. Or add an extra garage. Or a house with a large lot that you can subdivide and sell a lot or two off. Or buy a Contractor display home in a new upcoming development. Then sale after 2 years or when it makes sense after 2 years.

4.  California is expensive as you noted.  That is why an appreciation and tax play is better than trying a cashflow deal there.  Or trying 5 to 10 cashflow deals in another state.  Plus your downpayment and financing costs will be less on a single house.  Line mentioned above, it’s not about doors.  

5.   You get ready to leave.   Take the full sales amount “IF” you don’t have time or equity buildup to do the 2 year primary.  1031 into a MFH.   Then once the 1031 is done if “legal” take a loan out an buy your new primary house.  

6.   Don’t do accelerated depreciation.  With the above you will need to pay it back.   I asked when the other person will retire.   One of you needs to be an REP.  

Sit down with a tax accountant and a realtor in your market walk thru the above with them.  

Dont get dirty, dont get burned by OSS team members, dont get burned by tenants, use less money to finance your deals.  

 Typo. 1031.  

OP.  Sit down with a 1032 Accommodator and have them explain the details of a 1031.   

A couple problems dividing a property and selling in a “Timely” manner and then picking exchange properties of equal or greater value than the lots you sale.   Basically impossible with that many lots.  

Let’s say you have 12 lots and if everything went perfect in the exchange you would recognize your $30,000 profit per lot across the board.  But let’s say you sold 3 within the 1031 timeframe and you also found a property or 2 or 3 that are equal to or above your basis.   You would think you would also recognize  the same $30,000 per lot profit?  Talk with an Accommodator.  

If you go forward also ask them about doing a reverse 1031.  You have more control over the timing.  

If this is your 5th deal you should have already developed a banking relationship with a commercial banker. Switch over to a standard financial lending institution.  Ask for a line of credit.  You will need to build the relationship.  Move your banking there. 

 Call the State Banking Commission tomorrow.   Give them all the details, contact information, time lines, relationships, etc.  Plus your contact at the banks Fraud or Audit department who you have been talking with. 

Need more info.

Are both accounts at the same bank?

Is there a pre existing loan with that bank with either of you?

Did anyone in one of the accounts die?

No way they froze both accounts with no explanation.  What did their Fraud or Audit department tell you?  I could see no respond if 1 or 2 days.  But sounds like weeks.  Some piece of communication is missing.  If no response contact the State Banking group and get them involved.  

 And what is your input to the OP’s question?  

OP  Just for Kicks I'll go with 100% illegal alien removal by 12/31/2025.  Not looking for either a positive or negative NET population change.

All topics and issues even in REI, I believe in using both Push/Pull tactics.

Push:

1.  $100,000 fine for any company per individual employing illegal aliens.  At a company I worked at, we had a 16 year old boy running a warehouse forklift using a 7 year old girl's social security number using the existing Federal employee validation process at the time.  With AI or just plain data management, we should be able to catch quite a few issues.  

2.  No medical treatment unless legal status is shown.

3.  No education benefits given unless legal status shown.

4.  Housing- not worried about.  If they can't meet rentals, the landlords will evict.

5.  Darien Pass/Panama-  There already is a couple hundred miles of JUNGLE wall there.  Put in place a no pass zone there and along the ocean coast.  Apply pressure and add economic industry on/to Panama and have them do.  Immediately.  Within 1 day.

Pull:

6.  Green card/Student/etc etc permits/visa.  Ramp up programs.  You have 90 days to get legit.

7.  Vetting systems for permanent immigration.  Educational, monetary, medical, etc assets/skills. Any labor shortage areas, speed up green card process noted above.  Educational- any STEM or medical fields give them a 3 year citizenship process.  Monetary- they need to bring $XXXXX amount of cash in or monthly sources of income.  All other countries I have looked at, require this.  Medical- anyone with TB, Cancer, history of vaccinations, etc terminal or key health issues not allowed in.

8.  Only allow 100 Political Asylum passes by the President themselves ever year.  There are not millions, but Billions on people in the world with Political Asylum issues.  They need to handle their issues at home. Or if we are that concerned about them, we need to do Nation building, which no 1st world country that I know of has been able to do long-term.

9.  Do away giving citizenship based on birth in the US.

10.  We need to move away from dependence on China for both political and also capacity reasons as their population ages.  Move as much of that manufacturing South of Panama as possible.  If they can make a decent living, they won't want to leave their families or go where their food, culture, and language don't exist.

What is the impact to REI? I see no impact at all, if the above are all performed in concert.

Just like REI. Why will I fail at REI. Should I make my first investment? What city is the best market? We will come up with many different immigration questions as this occurs, but you approach each the same way you would do REI.

A.  How will they get back home?

B.  How about the 25 year old, who was 1 year old when they were brought across the border?

OP. 

1.  Biggest issue. Will she go into a retirement home at some point.  Let's say $10,000 per month.  The government will require all of her assets to be used up, except for $2,000 cash.  Even if she was to sale or gift the house before she went into the home.  They will go back at least 5 years and take back any assets that she let go.  Would keep the house in your name.

2.  Buy the house and loan her the money.  Whatever is closest to "Legal".  Have her give the smallest downpayment.  An interest rate that works for her.  Place a lien against the house in your name.  Have her do both a will and an irrevocable trust, with you getting the house.  The government still might get the Equity buildup, thus you want the payment to not accumulate to much equity.  But that is better than the full amount.  You get the property back at a stepped-up basis.  

3.  Keep the house in your name and charge her rent.  You pay for all taxes/insurance/maintenance.

OP.  Sit down with you Realtor and pose this info and questions.  Not tracking.

You're going to live in one of the units?  Which one?  $2,000 or $1,750?  What did you use to pay for rent where you live now?  You have to make up the $2,000 or $1,750 out of your pocket.  If you stayed with your parents for $0, then you have say, negative cash flow of $1,750.  If you currently rent for $2,500 and take the $1,750; you have additional positive cash flow of $750 for your rent situation.

Have you thoroughly looked over the capex potential issues?  Glad you are setting aside money, but if the HVAC is 20 years old, or the septic system has never been pumped, or the roof is 25 years old, etc; you will get hit with a cost before your build up enough set aside.

How stable is the other tenant?  If they leave is the market really good or how many months will you need to carry the other rental unit's costs?  Plus, you have to turn the unit over- paint, carpet, etc repairs?

If this is your first property and you are living in it?  Why are you having PM?  Plus, the PM shouldn't be over your portion of the property costs.

Glad you are looking at properties. But you have to many basic questions unaddressed.  Recommend you don't make an offer.  Join an RE group.  Walk through deals with one of them.  Keep doing deal analysis. Do you have a property checklist? Do you have a deal calculation?  Get up to speed more before doing this first deal.