All Forum Posts by: Daniel Murphy

Hey all, we recently did a cost seg & bonus deprecation on our STR for about $180k worth of deprecation.

Well... it turns out married life may not be married life by the end of 2023.  
Can anyone point me to resources on how deprecation recapture would work if we had to sell the STR?

Or info on any effects of changing ownership of the STR from joint to individual in the case of a divorce?

@Jimmyhee Quach, I think you have the correct line of thinking on things.  In situations like this, there is rarely a "perfect" answer. I'm always a fan of, tell me all of the options. If I have all of the info needed, I can make a more informed decision.  

I'll throw in a few more points to ponder.  

1) if you did cash your PTO sooner rather than later, there's a chance you could get better return if you invested it.  This is not guaranteed, but the market is depressed, and there is a chance you could get a higher rate of return by investing it into a taxable account.  This is the known vs unknown variable. 

2) I would also consider how long it would take to deposit into your account.  If you have the flexibility to get paid out whenever you ask, within a reasonable amount of time (say 2 weeks), you could wait as long as possible. Assuming if you had an emergency, you could float it for 2 weeks on a credit card while you wait for your PTO payout. The advantage is you get to leave it for longer, waiting for your 8% raise. 

All of your reasoning makes sense. It's just a matter of making whatever decision works out best for your situation.  

 You're 95% there.  You just forgot to subtract your standard deduction of $27,700.

So 100k income minus $27,700 is $72,300 taxable income. 

So your first $20,550 would be at 10% = $2,055

Your next $51,750 (72,300 - 20550) is taxed at 12% = $6,210. 

Total tax of $8,265. So your effective tax (tax owed divided by total income) rate would be even less.  

As a financial planner myself, I enjoy these conversations. Hopefully, this is helpful for some of you to know.  The industry is changing... 

The most common complaint I hear when someone talks about working with a planner is, "performance." It was mentioned multiple times in this thread. The truth is, if you think hiring a financial planner will get your portfolio better performance, you are measuring the incorrect expectation. In the past, when markets were less efficient, investment picking had value. 

Now, the research widely points to index funds being the best performing funds over time. So hiring an advisor, paying their fee & expecting equal or greater investment performance will likely not happen. You buying 100 shares of SPY vs your planner buying 100 shares of SPY will result in lower net performance because of the advisors costs. 

The good news is that the industry is realizing this & shifting more toward financial planning & comprehensive advice.  

Think of the amount of knowledge you learn from your various internet or youtube gurus.  Your rental guru. Airbnb guru. Investment guru. Mortgage guru. Business Planning guru. Real Estate Law guru etc.  

A good, experienced financial planner with knowledge of your financial "pain point" should have a broad and fairly deep understanding of all of these various gurus.  Add to that knowledge, years of experience actually doing the work with their clients at scale.  This has incredible value.

Think of it as, hiring the youtuber who made a video about 1031 exchanges vs. an actual professional who has processed countless 1031 exchanges. 

The financial industry has been shifting towards this advice-focused approach in recent years. There are a number of studies showing that there is plenty of Alpha (added value) to the client by working with an advice-focused planner. This (I hope) is where your expectations should be tied to. 

Go have a good conversation with one of your gurus. At the end of the conversation hopefully, you feel smarter, and more confident about your financial decisions than you did before the conversation. 

^^^^This is what your relationship with a good financial planner should look like^^^^

General question... When you manage a property for someone, do you require to be named as an "additional insured" on your clients property insurance or umbrella policies? 
Why, or why not? 

Hmm, I really love this question & whole concept.  Here is the Airbnb TOS regarding our memberships.

" 17. Member Accounts. You must register an account to access and use many features of the Airbnb Platform. Registration is only permitted for legal entities, partnerships and natural persons who are 18 years or older. You represent and warrant that you are not a person or entity barred from using the Airbnb Platform under the laws of the United States, your place of residence, or any other applicable jurisdiction. You must provide accurate, current, and complete information during registration and keep your account information up-to-date. You may not register more than one account or transfer your account to someone else. "

I am no lawyer, but terms of service are occasionally challenged & found insufficient.  
My line of thinking is, Airbnb allows "Legal Entities", IE a multi member business. 

Businesses often times have multiple officers.  Multiple members who could be the person in charge of the Airbnb profile. Meaning Airbnb theoretically couldn't delete your account because a new member was in charge of the account.  And since a business can be sold, the new member of the new owners could then theoretically be the manager of the Airbnb account.  All still within the legal entity.
With this line of thinking, I could see a case where you could transfer the ownership.  

You'd definitely want to run this past an attorney. If you call Airbnb, you'll never actually get an answer you could trust on this.  I think you'd have to read their TOS, make your interpretation, run it past an attorney & then give it a try! 

I also really like the idea of building a brand that you could sell. It would be different financing but I'm sure banks could get it done.  Real Estate plus the business would be a stronger package, sold as a business vs. just the real estate. You'd hopefully get a higher EBITA multiple too.  

Let the nay sayers nay... It's a good idea. Outside of the box & could prove to be lucrative.  I think this is a rabbit trail definitely worth following. 

@Jason Powell, I completely agree with you. More assets do not necessarily equal more complicated.  Luckily the financial industry has started to see this a bit.  More firms are starting to decrease their fees as their assets get larger. Not enough in my opinion.  

I purposefully structured my fee to step down dramatically & for any assets over $1M I only charge 0.1% additional. This is designed to be a relatively flat fee up to $1M.  
The industry is changing though.  I think you'll see that most larger or older firms have an older fee structure. Many younger advisors (XYPN Advisor Specifically) have more progressive & flexible fee structures.  

 I'm fully independent so I can bill however I prefer. The majority of my clients are AUM based but I can also do hourly or a retainer model.  
And yes, I am allowed to give advice on assets outside of the stock market. 

I've been doing this for 15 years. I'm not struggling to pay my bills so I'm in a lucky position to give advice because I love to help others. I purposefully designed my fees to decrease (much faster than most other planners) as you have more assets. And to have the option to bill separately. 

Hey all, 

I good friend of mine has a successful commercial debt collection company.  My thought was, they have people, systems & unique access to personal info that is harder to come buy on a small scale.  

I asked if they could use the tools to search people who are in pre-forclosure, delinquent on property taxes etc.  His answer was, "I could probably find that info but I don't know how to look."  
Does anyone have knowledge or experience of how I could leverage this relationship to help find deals? 

Schlage Encode. Although know that none will be without problems.  

At all costs, avoid Ultraloq.  I started with this during the supply chain crisis and replaced with Schlage asap. Buggy & horrible customer service.