All Forum Posts by: Roy Williams

I agree with that statement regarding the IRS' assumption. But they will have a hard time proving otherwise if your documents are in order.

Plenty of entrepreneurs work 80-100 hours per week in their businesses. It's killing me. I've had 3 properties listed for sale for the past 2 years and can't unload them. 10 properties is too much.

Thanks Jon for sharing that info. I don't have onsite management so I should be OK with regards to that paragraph.

I am a one stop shop...haha

Thanks for sharing that story. Does not sound like fun. Luckily my losses in total are approx $40k, only about $15k over the normal $25k allowance. Hopefully they will find that $15k isn't worth the time and money to make this a landmark audit.

I may spend a little more time that most on my units because they are low-income. Which means lots of turnover, chasing down people for their rent, and many repairs.

Hi Folks,

Our friends at the IRS are auditing my 2009 return, mostly because of my real estate professional designation.
I have a full time job and the rentals take up all of the rest of my time and I easily spend more time on them.
I own 10 properties with a total of 30 units. Based upon your experience, as long as I can show a weekly log (which I can) of my time spent on my properties are they going to make much of a fuss over it given the amount of real estate I own?

Thanks!

Jennifer:

What is the solution you mention?

To update the situation, the rental market in my area has weakened and there is substantial vacancy in my properties, probably 15-20%.
The property I am way underwater on is full but I'm nervous about the prospect of making the mortgage payments on the other properties going forward.
I am having to pay all the taxes out of pocket this year. I have a couple of the properties with the most equity (most have no equity) on the market without much action.
The nuclear option would be bankruptcy or to just allow the lenders to foreclose. Which would be the better option if it came to it?
In a chapter 7 bankruptcy can you elect to maintain individual properties as long as they do not contain equity if you believe they may be viable in the future?

Good idea but those properties were all financed at either 95% or 100% and the money went to closing costs. So even if I was able to sell the others there would be no equity left over.

Hello, I am new to the board need some advice. I purchased a dozen rental properties over the past 3 years during the times of easy money.
Once of my purchased was a double that I paid cash for. $29k purchase price. I then went to Bank of America for a LOC so I could use the cash to purchase additional properties. After Bank of America's 'due diligence' (if you can call it that) they advised that they valued my property at over $100k and would extend me a LOC at 80%LTV.
I almost fell on the floor and told the loan agent that I paid no where close to that but she didn't seem to care. Long story short I proceeded to use almost the entire LOC to finance my other real estate holdings.
I now owe $80k on this double via a interest only variable rate LOC when the while the property is probably worth no more than $35k. Does anyone have any ideas how I may exit this position without getting sued by the bank and destroying my credit?
I have been making all payments for a couple years and still can although it stings a little and I thought with the current credit crisis this might be a time to work out a creative solution.

Thanks.