All Forum Posts by: Jeff Wang

Hello,

Thanks for the feedback. To answer some questions above, this is a properly executed 1031 exchange of like-kind investment properties.  

- The relinquished property sold at $1.4M

- The replacement property purchased at $1.55M

- Sale & purchase have been timed so that close of escrow on sale of relinquished will be followed shortly buy a purchase, which we are working on now.

- The unsecured debt was given as a gift so there is no note, mortgage, or lien on my property. 

Also, based on my research it appears that one can pay off unsecured debt at close of escrow and not have it be considered taxable boot. See page 44 of the following PDF:

http://www.millernash.com/files/Publication/a89610...

Thanks

Hello,

Many years ago, my family helped me purchase a house and gave me a portion of the downpayment. Fast forward to today and I've made a nice profit on the house.  I'm currently in the process of doing a 1031 exchange and would like to pay my family back the borrowed money.

Can I do this at the close of escrow without incurring taxes? If so, how would I do it?

thanks

I have a property in silicon valley that is just breaking even. It has appreciated about 25% though in just 4 years. It's really difficult to find high cash flow properties, particularly in San Francisco proper. There are a lot of multi tenant units that come with renters that have been living decades and paying 1/10 of market rates due to rent control. That makes buying multi-tenant units difficult as well. From what I see and hear, the particularly great deals in the desirable areas like pac heights, marina, mission get snatched up by savvy contractors with all cash bids before it has a chance to hit MLS.

I could go up to $10M for $2488/year or $207 per month. I don't know why I'd want that much though.

Hello,

I have one investment property which is a SFH. I have the option of going with a landlord policy with $1M in liability coverage. I can pay $300 more per year to get that to $1.5M using the umbrella/excess insurance policy. I'd like to keep it simple by only getting the landlord without the excess but I'm not sure how much is enough.

Please advise.

$100 a year seems kind of steep for a small in investor with only 1 or 2 properties. What are the features or improvements that could be made over quicken ?

I also use an excel spreadsheet but considering developing a web or mobile application for me and others to use.

What software are people using to manage their investment properties? I looked Buildium but it doesn't provide financial metrics and analysis (cap rate, cash flow, operating expense), etc.

I should also mention, doing the standard discounted cash flow analysis on my investment property would take into account depreciation.

Well, I will probably calculate my returns both ways. Even if you pay it back, you are forgetting about the time value of money. A dollar today is worth more than a dollar 10 years from now (or whenever you sell). Put another way, let's say I got 10k in depreciation tax shield and I put it in a 10 year treasury note yielding 5%.

In 10 years, that 10k is now worth $16,222. If I sell the house, I will pay back the $10k and I've made the difference of $6,222 in the process. You are essentially given a 0% loan. Or, if your marginal tax rate is > 25%, Uncle Sam is paying you money, since depreciation recapture is 25% vs your potentially higher marginal tax rate. That is the way I think about this.

I am not sure that I agree that depreciation tax shield is creative math. I think of it more like a dividend paid from Uncle Sam. If I don't account for it in my cash flow analysis, how should I count it? It is definitely money that I can use to pay down the mortgage or for whatever else. If I do a 1031 exchange, I'll never have to repay the depreciation.

If I'm trying to calculate a return on investment, how do I account for the depreciation tax break?