All Forum Posts by: Jeff Copeland

The listing agent works for the seller. They are legally, contractually, morally, and ethically bound to represent the seller's best interests and get as much money out of you, and as much protection for the seller (contractually speaking), as possible. 

Is that who you want presenting your offer?

If your buyers agent is not responsive enough, get a better one. 

That being said, the buyer is another important piece of the equation for a buyers agent: 

Are you a legitimate cash buyer with liquid cash that is ready to close on this deal, submitting realistic offers that are aligned with the state of the market? 

Or are you a wholesaler asking your agent to submit 10 lowball fake "cash" offers per week that have very little chance of being seriously considered?

As agents, the former can be a pleasure to work with, and make great long term business partners. The latter can be a waste of time and ruin your reputation.

This is one of those cases where it makes sense to pay for a few hours of a knowledgeable professional CPA's time. Don't take tax advice from a public forum. 

That being said, if she lived there for two of the last five, she'd most likely have a capital gains exemption, prorated to exclude the percentage of the property that was rented out. How to best calculate the proration in a manner than is reasonable in the eyes of the IRS, and where this fits into her overall tax liability, is where you really need a professional set of eyes. 

And needless to say, be cognizant of that 5 year deadline.

I'm not aware of anything unconstitutional about state licensing laws. They exist for consumer protection. 

It can be just as bad for Joe Public to get duped by an unlicensed person practicing medicine or law as it is for him to lose his hard earned equity to an unlicensed person practicing real estate. In such cases, the unlicensed activity is investigated and enforced when it is reported. 

I'd argue that in real estate, it's more likely to go unreported, thus it's also more likely to go unenforced. 

There are legitimate wholesale real estate operations, and there are shady unlicensed individuals with no money who prey on unsuspecting distressed homeowners (often because they are taught to do so by some real estate guru offering a weekend seminar). The latter give the former a bad name. 

This is going to vary so much from person to person depending on their situation and the complexity of their return that it's hard to compare apples to apples. 

If you want the cheapest, go to H&R Block. 

If you want to save tens of thousands of dollars through advanced tax strategies and smart handling of your tax returns, pay a great CPA whatever they charge. They are worth every penny.

There's a lot to unpack here before we all pile on your property manager:

1. My tenants have been late w payments for 2 years and not once did my property manager deposit the funds.

What funds? Your rental income? Late fees? Something else? I assume you mean late fees? (Because surely you didn't go two years without receiving your monthly rental income?) - What does your PM Agreement say about the collection and distribution of late fees? It's not uncommon for part or all of them to go to the PM. And, looking back two years (COVID), late fees were essentially uncollectable at times here in Florida and were often waived when waiting on rental assistance payments, or to preserve the landlord's ability to pursue an eviction. You aren't providing enough information here to even understand what you are talking about, let alone sharing your PM's explanation. 

2. She tells me one price to fix something,I agree,then I get a statement showing more!

This sounds bad, but we still need more context. We all know it's not uncommon for an contractor to give you an estimate for something, and then the final bill to be higher due to some unforeseen problem or cost overrun. How may times did this happen? On what type of projects? What were the costs overruns (and why)? And what were the original estimates based on?

3. Long story short,property manager stated she would take our tenants security deposit and pay the bill and we can part ways. 

What bill? Do you owe the PM money? Do you owe contractors money for work that was done on your rentals? If so, this adds a very element to your story. 

4. Isn't it illegal to touch any money from tenants deposit?

It depends. Again, we need more context to make any sense of what you are saying: 

If the lease has expired, the PM can and should withhold the funds as appropriate from the tenant to cover the cost of any cleaning, junk removal, damages, repairs, and unpaid rent/fees. Whether and how the PM disburses these funds to you depends on your contractual relationship with them (and your answers to #3 above). 

If the accounts are just being handed back to you from the PM to the landlord, then yes, the security deposits belong to the tenant and should be transferred. But if your PM is holding a $1000 deposit, and you owe your PM $1000, it's a wash. So, in this scenario you could also just deposit your $1000 into your new escrow account and handle them as the security deposit in accordance with Florida Statute 83.49 going forward.

Florida has no state income tax, so your CPA can really be anywhere in the country and still help you with tax strategies for your federal tax return. 

So you might consider just looking for a CPA who is experienced with real estate investing, rather than one who is in Miami. 

There are really two exit strategies when wholesaling:

1. Assignment of Contract: Get the property under contract, find another buyer, and assign the contract to them. They take your place and close on the property. You charge them an assignment fee and get paid at closing. 

2. Double Close: Get the property under contract, and honor the terms of the contract. You close on the property and own it, as agreed upon in the contract. Then you turn around and sell it again in a "double close" - You might close on the purchase at 10am, and then close on the sale at 2pm, or the closings could be days or weeks apart. The key difference is you close on the first transaction, rather than assigning it to another buyer. You (hopefully) earn a profit and get paid when you sell.

Advantages to seller:

1. Lump sum of cash from your down payment,

2. Monthly income from your payments,

3. Interest earned on top of purchase price,

4. Reduced, but not eliminated, tax burden.

(Check out https://www.biggerpockets.com/...)

However, a 1031 exchange is a completely different strategy, whereby they are rolling all of their profits into another real estate asset, and deferring all of their capital gains tax. 

(Unless they opt to keep some of their profits and pay taxes on that portion, known as boot,)

A 1031 exchange is usually planned out in advance, and often even "announced" in the property listing, so the seller can demonstrate intent for the IRS. 

So if they seller was already planning to do a 1031, and you offered seller financing, then your offer probably wasn't even seriously considered.  

Rule number one of making offers is find out what the seller needs. 

On the one hand, you bring up an excellent questions with regards to HOA hours counting or not. I'd br curious to hear @Taylor Brugna's (or another real estate CPA's) take on this. 

On the other hand @Drew Sygit is absolutely correct. If real estate is your only source of income, what active gains would you be trying to offset with passive real estate losses?

The software you choose is not going to make or break you. Your level of expertise will. 

You have to know a lot of stuff about a lot of stuff as a property manager, from privacy and fair housing laws, to bookkeeping and accounting, to construction and renovations, to landlord-tenant law and evictions, and hundreds of things in-between. 

I'm not trying to discourage you or saying it can't be done. But one fair housing complaint, botched contractor job, or prolonged eviction can quickly cost you far more that a property manager, so don't sugar coat it: Go in with your eyes wide open. 

One suggestion I have is to watch every video at http://www.evicttv.com/all-vid... (I have no affiliation with them, I just believe this is an incredible free repository of information for landlords and PMs - It's literally free education from a well renowned expert). 

This will give an idea of the breadth and depth of knowledge you need to be a successful property manager. Some of the info is Florida-specific, but it will still give you an idea of what you need to learn and know about your local State (or District, in your case) and municipal rules and regs.