All Forum Posts by: Greg Scott

I've never heard a CPA distinguish between REPS status and REPS without active participation.  Every CPA I've talked with says that to achieve REPS status you need to be actively engaged in real estate (plus other qualifications I will leave out.)

FWIW, the poster did not say whether or note he materially participated in real estate outside of the self-storage passive investment.

Thanks for explaining your PoV.

If you have Real Estate Professional Status (REPS - a specific IRS designation not a "do you invest in real estate" question) you can deduct 100%.  If you are not, it depends on your income and you are capped at $7K.

I presume you are wholesaling this, correct?  As an owner you will usually get your best price when fully marketed.

As a wholesaler, the best way for you to market this would be to already have a buyers list.  If you don't have one, you could partner with someone who does.

You could always post something here and see who bites.  I have friends all over the country looking for a good deal.

Id offer to let your old tenant out of her lease, no penalty.  Otherwise, offer to install a shower mixer valve which will prevent scalding.

You cannot remove the new tenants unless they are violating the lease.

It is best to look at the after-tax consequence of each action.

Flipping can be considered a trader business an you would pay ordinary income taxes plus FICA. 

Rehabbing and renting is taxed as rental property. Often the cashflow can be 100% shielded from tax through depreciation.  Also, depending on your personal situation, depreciation can reduce taxes on other income you receive.

The latest appraisal may be accurate depending on when "a couple of years ago" was exactly. As you know, interest rates have gone up since mid 2022 Cap Rates have gone up a corresponding amount, which means that if NOI has not changed, the valuation has dropped.

Are you having the property appraised for the purpose of a sale or sale of your shares? (With a HUD loan, I would be surprised if you are looking to refi.) If your are just doing it for informational purposes most brokers can give you a BOV that may meet you needs. If you need a true appraisal, there are many firms that can do that. On our latest refi in Indy (not to far away) we used BBG out of Chicago. Their info is attached.

I don't know anyone in real estate that has elected S-corp over Partnership.  There may be some specific use cases where an s-corp is better.  In most real estate cases you simply have forced yourself to pay more taxes by choosing s-corp.

I don't pay myself a salary.  I regularly take distributions.