All Forum Posts by: Chris Masons

For indoor runs PEX hands down. Big debate is how long will it last vs copper.

Studies seem to point to it lasting a long time. You can't beat it's flexability vs. the rigid form of copper.

regards,
Chris

If your somewhat handy installing engineered flooring can be a nice touch to a rental.

I ripped out original carpets from a house built in 1980 and put down pergo flooring in living room and dining room.What a difference!! Looks great, super easy to clean and reasonably priced. Not reccommended for a kitchen or area subject to spills and water but a great and cheaper alternative to real hard wood flooring which can be double in price.

chris

Hi Manuel,

a great way to get started once you have a full time job and proper down payment is to look for a nice two family home that you can buy and live in one apt. and rent out the other.

This is a great way to get your feet wet and see if you are cut out for this business. It will give you a chance to see how being a landlord is, dealing with one tenant, managing a small property as well as putting other people's money to work for you IE. having your tenant substancially pay down your mtg freeing up cash for you to do other things with IE. invest, save, pay off debt. etc. and finally be able to capitalize on some great tax advantages on your federal tax return.

Owner occupying and managing a small 2 family is about as easy as it gets IMO and this will give you a taste of the business. And I am going to be honest it may leave a bad taste in your mouth or my leave you wanting to dive head first into your next deal :)

Nate,

You're right the COC return is a great metric to truly identify your real returns on your own capital investment.

That being said, I have had off years where I have had alot of repairs maintenance as well as capital improvements on one of my properties to the point I was still showing a profit, not much but something meaning I would have a tax liability. Once I added depreciation in, it brought my to a loss for that said year, which to me is one of the great benefits you get with RE investing. It is relative though your right, the more you depreciate the more you spent or more the property cost I should say...

Then I have had great years where I am struggling to find expenses to offset my tax liability. The funny thing with depreciation is even if you don't take it you are required to "recapture" it and add it back to your cost basis when you sell your investment so even if you didn't take it for whatever reason you are stuck with it later on.

I also cannot stand when mtg lenders look at your returns and see a loss and don't take depreciation into consideration as well as other things in the accounting world. The whole object is trying to reduce your taxable income as much as you legally can so you can be in a better tax position. While from a lenders standpoint they want to see more income then you usually show on your returns.

This has hurt me on more then occassion.

Thx Jon. I should have clarified my question better. I am aware of the IRS "real estate professonal" designation and do not meet this.

Like you said I work full time as a systems admin with W-2 income - sometimes alot more then 40 hours a week LOL It would be very difficult to try and claim that on top of my day job I am working 2081 hours managing my properties.

thx again.

chris

Nate,

I would think having a negative cashflow due to depreciation is one of the huge benefits of Re investing. My thought is where else can you show a paper loss but in reality have a profit?

Here in NJ properties are not cheap, the depreciation I take on my properties definitely helps lower a good chunk of my taxable income from my passive investing activities.

Am I missing something or are you looking at it in a different light?

regards,
chris

Hi Charles,

As a landlord my income is a form of passive income as defined by the IRS. I recently learned that due to this I do not have to give my vendors 1099s for work I had done at myy properties.

The downside is that I am lited to taking a max of 25k in passive income losses which leads me to a question: What would I need to do to be able to write off all my actual losses and not be capped at the 25k limit as set by the IRS.

thx,
chris

Tenants who think you came down with yesterday's rain!!!

Definitely also what Rich said, I have seen some fantastic deals but just wasn't in a position to buy at the time.

Lastly and this may be #1 above tenants trying to give you the run around, that damn leak that happens to pop up at the worst time or the leak that you can never seem to find easily!!! In short:

I HATE WATER WHERE IT DOESN'T BELONG!!!!

chris

Some great inspiring posts on this thread.Congrats to those who have achieved success!!

Geoffrey I am not sure of your age but will assume you are young with no kids....

I started out fairly young myself, bought my first investment property @ age 24. Happens to be the best property I bought to date. At that time I was single and no kids. I was able to dedicate unlimited time to Real Estate back then.

Today I am married with one 4 year old, work as a systems admin during the day and trying to close on my sixth investment property. (I am a buy and hold rent for + cashflow and appreciation guy) I have managed to manage all my properties myself and I can say this business has allowed me to save/invest a nice amount of money as well as buy things and travel too.

If I can give any advice It would be invest and learn as much as you can at a young age and while you don't have as many responsibilities. I find it much harder to devote time to my RE investing due to family and day job. When I didn't have my son around I wouldn't think twice about going to see a property or go out and look for deals. I guess what I am trying to say is take advantage of your free time and try to use it wisely as you get older it gets harder to find time due to other responsibilities in your life.

One of my main goals of RE investing is to retire at a fairly young age and be financially stable without relying on social security. If I get it fine but I don't count it as a source of income later on, I count on my properties which will all be paid off in full by the time I am 60.

If you are dedicated you can really achieve alot in RE. If I could do anything differenly I would have been more aggressive when I was younger, and secondly I wish I would have networked and worked on bigger deals with other people instead of using my money and buying alone.

Best of luck and remember if you can dream it you can achieve it!!

chris

So to clarify what Bill and Steve are saying... I am strictly a landlord, no wholesaling, rehapping etc.... HOWEVER I do actively participate in the management and rental responsibilities of all my investment properties. I am however NOT considered a "Real Estate Professonal by definition. IE. I cannot write off unlimited passive losses but am limited to 25k which ends up getting phased out due to my W-2 income.

That being said and to make sure I understand, I would fall in the same boat as Amanda and not required to issue 1099s? Even with 4,5, or 6 investment properties??

thx in advance,
Chris