All Forum Posts by: David Brooks

Thank you for the response! I'm actually not leveraging bonus depreciation at the moment, and am looking simply to offset normal expenses (including standard asset depreciation) against non-passive (W2) income. I know that if a cost seg, l would need to back that out of my California return.

Your answer seems to confirm what I suspected. If you had a client who had no bonus depreciation, would you recommend that they don't try to employ the loophole?

I've received advise that our friendly STR loophole can not be used to characterize STR income/loss as non-passive on a California tax return.

I can see an explicit exception in CA Tax Code § 17561 that says you can not use the qualifications in Section 469(c)(7) (Real estate professional) to render that income as non-passive, but I see no callout for 1.469-1T and, as such - as a non-CPA - I do not (yet) see a reason why we cannot follow the same rules for CA that we do for our federal taxes; e.g., if the business is not a "rental" business per tax code, we count that income as non-passive and offset other income (W2, etc) similarly.

Does anybody else have some guidance (or opinions) on this matter? Thanks!

Great, thanks! I'll definitely check it out

Ok, so I did a search and dug through a bunch of posts from folks in the Inland Empire (I'm in Riverside, but have properties in Arrowhead and Yucca Valley) looking for a real estate investor club. These forums are great, but I'd like to start building some real-world connections and get some advice. Many of the other posts are 10 or 15 years old, though, and at least some of the links and information seem out of date.

So, any suggestions for someone in the IE looking to connect? 

@Jessica Reynaga This is my second spring, and things are actually going marginally better (largely because I had my first long-term [4 week] rental, which was it's own adventure), but my calendar is pretty barren after this weekend. My advice is - don't judge anything based on the spring and summer on the mountain; you are absolutely right that prices and occupancy are pretty low right now, but things pick up quite a bit in fall and winter. Good luck, and if you have any questions, don't hesitate to ask! 

@Laura Kastner

To your question - I looked at some properties in Desert Hot Springs, and ultimately decided against them. In my research, it appeared that DHS would be less desirable to visitors.

So, I'm a risk taker - but I like to hedge my risks. Here's the route I personally chose.

I found myself in almost the exact same place about two years ago, with 200k of HELOC to work with - and I decided to start close to home before expanding OOS. I carved out 50k as an emergency buffer, and then split the remaining 150k across purchasing and preparing two properties in the hottest local markets I could afford (which I identified as San Bernardino Mountains and Joshua Tree).

Both of my properties are in unincorporated areas of SB county, and I've found it quite friendly to STRs. The high desert is generally quite STR-friendly as well, but the Palm Springs, Palm Desert, and the other cities along the 10 are quite restrictive.

@Monique Moskowitz and @Neha Sampath - unfortunately, my realtor has since left the area, but she worked with Triad Realtors in 29 Palms. Best of luck!

@Matthew Vaughan

Unfortunately, San Bernardino County can be a real challenge to work with (not because they are difficult, but because they are understaffed). I had to re-open a shower pan permit that hadn't been closed properly, and it took about a month to get it sorted out. There was no construction involved, and all it took was a final inspection (that took a total of 2 minutes). They will not issue an STR permit until all permits have been resolved.

All permitting is done through the county's "EZOP" system, and getting somebody on the phone to talk can be difficult. I investigated the possibility of building a house on a piece of land, and every contractor warned me that any permits that require construction will take a year to process. I think what you need to do will land somewhere in between - but I'm not expert. I would doubt you'll be ready in a couple of months, though (this summer, just getting the STR permit with no other complications took me six weeks).

Your experience might be different - but this is what I've learned as I've tried to figure this all out.

I'm looking to refine how I'm managing my STR in Lake Arrowhead, and I feel like I'm looking for the holy grail - namely, a reliable, efficient team of partners I can rely on (cleaner, handyman, snow clearing, and general "can't open the door" assistance). I've seen Turnoverbnb, but I'm looking for any other recommendations - perhaps from current hosts in the area with locals who they might recommend? Much thanks!