All Forum Posts by: Buddy Holmes

@Kyle Houlahan, I am not the CPA or Tax specialist, but from experience, I understand the LLC passes directly to your personal Tax return so.. It only helps in Liability as I understand it. However, any RE losses with depreciation and maintenance expenses should provide a loss to cover your rental income and have some left over. The rule is the loss can cover up to $25k of W2 income with out any question. To use more than $25k you or you wife need to be a professional and met some IRS rules. As for the fix up costs they get added to the value of the property rather than be a direct expense. However look up Cost Segregation Study or Analysis. For the addition of new appliances, flooring, blinds and stuff you can do a 5yr depreciation and get a first year bonus as well. For landscaping, sprinkler, patio you can do a 15yr depreciation and also get a first year bonus.

Just some thoughts to do more research on.  I am sure the experts here on BP  can fill in more details.

Welcome to BP. Cheers, Buddy

@Stephen Pelcher, welcome to BP from down the road in Charleston!  Great info here for the asking.  Like yuor idea of a summer home in Iceland.  We did a cruise around Iceland last July. What a beautiful place.  We happened to be on a UK cruise line when the UK lost the Euro meet to the Iceland team.  They said a hugh % of the population (25%+) went to the match and the entire population met the team at the airport when they got back.  A neat Country!

Cheers, Buddy

@Josh Pitts, @Mark Mattison and I put together a group who met last 19 June at Steel City Pizza on Dorchester Rd. I could not attend that evening unfortunately, but the turn out was good and over a dozen REI and want-to-be REI's attended. Steel City is open to the meet up idea on Monday evenings on their covered patio. I you are OK with a larger group, we plan to try to do this on a monthly basis.

Cheers, Buddy

@Dave Toelkes, and natalie kolodij have offered sound advise.

I might add a caution to the but a condo advise in that Condo associations can be worse than PM!  But also add to the rent out for two year plan, cash out some funds too buy the modest and smaller vacation spot and if they want to move back after two years rent out the new home for income.  Tell them or help them buy a new place that will work for a good rental.

Cheers,

Buddy

If there is a large tax issue, use a 1031 exchange. This assumes you want more REI properties?

Do watch the movie "Pacific Heights"!!  However I have just completed a two year lease with a similar Tenant from Brussels.  What he did was to get his company that had transferred him to Orange Co., CA

to contact my Property Manager with backup.  They didn't pay 6 mo in advance but did pay every month 2 days early.  He, an engineer, also did many small repairs, just asking for materials to be covered.

Check his job.

Cheers,

Buddy

Hello Meirah,

I grew up in a frame home in Jax.  We sold it after my Mom had lived there over 50 years.

It was built with a crawl space and metal "termite shields on each post and the CB foundation.  I am not sure if the block was poured full of concrete like is done now.  I have also built a new home on St Simons Island, GA. It is frame and built with metal "termite Shield" just like my childhood home.  All the block was poured full of concrete with a Lentil type block and bolt downs to meet modern wind code.  Also the ground was treated and we have termite inspection bond.   I don't recall ever having seen a termite man around my childhood house although my Mom lived there by herself most of that 50 years.

So I would not be afraid of a frame home in Florida.  You do need a CL-100 and I would do a termite bond on the rental.

Many Florida home are CB (block) homes. I have a couple of rentals that are.  One of my CB homes has a crawl space and wood floor and frame interior walls so you may well have the same issues as a frame home.  The other rental is on a concrete slab and block exterior walls.  There is one species of termite that builds a mud tunnel up the side of a CB wall to get to the eve and roof framing.  I have only seen this type in Aruba but I am told they are in the South as well.

Hope this helps.

Cheers,

Buddy

Glad the response was good.  sorry I had to miss the meeting.  Ill be there for the next one.

Cheers, Buddy

@Harrison Engle, Not the expert here but..

1) Many states have Usury laws limited the upper end of % interest.

2) The IRS always has this "We think that you did this to cheat us out of taxes" clause.

So be careful but the added benefit you described for the buyer could allow the seller to

spread the income from the sale over the term of the loan and setting his income to his benefit. (in seller financing I think he already gave up his Long term cap gains rights)

It will be interesting for others thoughts on your scheme.

@Bill Exeter, Good point! I had not thought about that side of the DST before. I am closing in on the 10 property limit.