All Forum Posts by: Ezra Nugroho

@Yuliany W. I think I am going to come. It will be nice to finally meet with Kristian. Are you taking the kids with you?

Bumping it up..

With my rentals, I generate paper losses from operating expenses, repairs and depreciation. However, because of having 2 incomes in the household, my wife and I got phased out, and I cannot claim those losses against my w2 income. Now it seems that those losses are allowed to deduct gains from other passive activities. But what are the passive activities that are eligible to deduct the paper losses from?

I once thought that capital gains from stock investments can be negated from RE losses, but a friend of mine said that it's not eligible. 

So what other passive activities are actually eligible to be counted against RE paper losses ? Income from other rentals?

Other than being a real estate professional and spending 750 hours on it, what can someone do to realize the paper losses? Or just don't even bother?

@Dennis Weber I am setting mine as an LLC with check writing as well. There are a few avenues where I can invest right now, but I am trying to find if there are better investments out there. Good luck with yours! Do let me know if you've found that 20% yield on 100% of funds with 0 risk!

It seems that the consensus seems to be first lien on a property with some conservative LTV, which is consistent with what I had in mind earlier. I guess it makes sense to start looking at triple net as the value of the portfolio becomes large for wealth preservation.

I know it's pretty common for a 1st lien note to yield 9% per year, which beats the long term average of stock market of 7%-ish.

@Brian EastmanThanks for your comment about comparing owning a home in IRA vs investing in other asset classes in IRA. If everything is done right, do you think it's favorable to own a home vs. note investing? If I were to own a home, I'd probably arrange it like: 80% purchase price, and lets say we allow 5% closing cost. 10% can be in a conservative common investment, for example an index fund, easily converted to cash for capex needs, 5% in cash at the bank for quick emergencies. Since 5% of the portfolio is not yielding anything, and since we loose 5% up front for closing cost, the property better yield north of 10% cash on cash to make it work.

I guess that's why note investing can be better, quite a nice deal with much of the headache.

@Brian Gibbons, thanks for your feedback. @Dmitriy Fomichenko, thanks for your insights, as always.

@Dennis Weber, it seems that you are having some plan that may pay off nicely. I guess similarly, investing in non-performing notes can potentially yield well too, of course if you have the time and the patience to work on those.

While talking about this topic, when is SDIRA becomes subjected to a UBIT tax? What other things do we need to pay attention to to stay in compliance with the IRS while maximizing the yield?

Oh, no, a meet up without @Account Closed, here is the meet up that you'd want to be in. 

Real Estate is certainly a great vehicle to invest because of the various tax benefits associated with it. However, if you invest with pre-tax money, some of those rules may not apply, for example depreciation tax write-off. I know many people buy real estates with their IRA money, but I have heard someone told me that it's not the best vehicle. I also know from experience that it's pertinent to keep ample cash reserves while investing in RE for unexpected repairs, etc. This means that someone should not buy the most expensive property they can afford with SDIRA, but maybe only at 80% IRA worth and 20% reserve. But this means that you are not fully invested, not all of your money is working. I am certainly novice in this area, and would love to learn more.

What would you consider to be the best SD-IRA investment vehicle with it's tax implications? Common paper assets, stocks, mutual funds? Buying rental properties? Performing notes/private lending? Non performing notes? Empty land for long term appreciations?

What would you recommend if your IRA is worth 20k, or 100k or 1M?

Thanks in advance!

Thank you for sharing, my friend!

We all learn from experience, and our leverage is if we can learn from each other instead of having to make the same mistakes.

@Account Closed

I am an odd ball West Coast investor who invest in Harrisburg Metro, Central Pennsylvania. I am not that experienced, but I've been really putting the time for it. This March, I just closed a 4-unit building with 12% equity per the appraisal. The gross cash flow is 1.6%, but I am paying water and sewer for the units, let's just say it's equivalent with 1.3% if I were not paying any utilities. On top of this, you gotta add your PM, Cap-ex, vacancies, taxes, etc. 

Although I invest out of state, I am with @Jay Y, I tend to advise people to invest locally. 

If you want to invest out of state, how much time or effort are you willing to spend on it? Not just managing the managers, but in getting to know that market? 

My advice is this: Invest locally, even if it is out-of-state. You gotta make that market to be your local market. You be willing to spend the time to learn it's specific niche!

For example, in 4-season states, no one wants to rent in the winter, so you gotta do what you can for leases not to expire in cold months. Do you know the local good school districts and the local getho? What's the unemployment in that area? What's the driving forces for the economies there? etc.

Identify your market, and start networking with the experts in that area.

By the way, Minh, Johnson, Jay, Troy and I know each other in real life, although some better than the other. We frequent the local BP meetup that take place once a month. Keep an eye for the next one, it would be a great opportunity to network.

Cheers, and have a great long weekend!

Johnson,

Thanks for organizing this again! It's looking like a go for me tomorrow. Can't wait to meet with you and the other usual suspects.