All Forum Posts by: Jeff O.

@Clark Stevenson  Same here.  Will be listening as well.  I have investments in both AVAF1 and AVAF2.  Sent the list of questions from @Brian Burke to Ashcroft today.  Hoping to get some clarity tomorrow.

@Sean Barber I had the same question/concern. That's why I  wanted to understand what was the original strategy for Fund 1.  BAM mentioned that Fund 3 plans to do 'semi-major' renovations which would lead to $100 to $400 monthly rent growth.  The risk in executing the plan should be lower because these are 'known' assets.  They also used 3rd party appraisals to set the selling/buying price.  Would like to hear other thoughts as well.  

I am also looking at Ashcroft Value-Add Fund 2 which is a more straightforward value-add strategy.

I am considering it as well.  Listened to BAM's Fund 3 webinar.  From what I understand, Fund 3 plans to buy 6 assets from Fund 1.  Have you guys seen other syndicators take this approach?  Or is this just because of the lack of opportunities in the market?

@Bobby Shell: Did you invest in Fund 1? I don't have the investment material from Fund 1. But curious about the projected vs actual IRR for Fund 1.

@Jason Merchey: Did you invest with BAM?  Curious about your take on BAM's strategy for Fund 3.  I invested in Ashcroft and Praxis late last year.

Hello @Michael Plaks and @Ashish Acharya, are you allowed to change/switch the category of your engagement to the property from Passive to Active participant in the future once you classify them when you acquired the property?

The reason I ask is because I bought my rental from a turnkey company last year and so far, there haven't been any major repairs.  But I imagine the maintenance repairs would come in the future and those will require my approval if it exceeds a certain $ amount.  In addition, I won't be benefiting from the $25k special allowance as an Active participant right now because my income is beyond the limit.  But if my income drops in the future, classifying it as active participant might come in handy.  

Thinking if it's better to classify as an Active participant now even though I am not getting any benefit out of it so I won't have to change it in the future?

Would switching between the two categories trigger potential audits?

Hello @Basit Siddiqi, thanks for sharing your insight.  I have do have a related question as it relates to deductions that can be capitalized as part of the cost basis (depreciated for 27.5 years) vs amortized through the life of the loan (for example 30 years).

1) Home inspection fee.  This was conducted to acquire the rental property - I assume this can be capitalized - added as part of the cost basis and depreciated for 27.5 years.

2) Lender's title insurance.  Should this be capitalized as part of the cost basis?  Technically, this is part of the lending process so one would think it should be amortized.  I was looking at the IRS publication 527 and it's saying you can capitalize title insurance. But it does not go into specific whether it's referring to an owner's or lender's title insurance.  So I assumed the lender's title insurance can be capitalized as part of the cost basis and depreciated for 27.5 years.

3) Prepaid Home Insurance.  I pre-paid 1 year's worth of home insurance as part of the closing cost even though I closed on the property in Jun 2021 (policy coverage runs from Jun 2021 to May 2022).  I assume the entire amount can be expensed for 2021 since it is within the 12-month rule for pre-paid expenses.

Appreciate your thoughts.

Thanks!

Thank you @Gorden Lopes!

Did you guys push through with your investments in New Market, AL?