All Forum Posts by: Jenning Y.

@Daniel K. 

Keep your Austin properties. If you really want to buy some properties in San Antonio, you can cashout refinance and pull out of some cash from your Austin properties.  But in the long run, there's no way that San Antonio investments can beat your Austin investment, no matter how good  San Antonio's cash flow may sound on paper, not even close.

From my own experience as an OOS investor  for almost 10 years, my take is for OOS investing to be successful, appreciation is much more important than cash flow. I know most people do not agree with me on this point. But as properties are aging, repair costs will add up, plus property management fees, most of your cash flow will be gone.  If you invest locally and manage them by yourself, that's another story.

I am living in Texas but own rental properties in state of California, Florida, Texas and mountain states. Want to add a few comments.

California’s population increase rate is about national average in the last decade. Considering California had more international immigrants, it is fairly to say that California had more outflow than inflow within United state. That outflow percentage may be small comparing to California’s huge population base, but it is a big number for surrounding states and push the housing prices of surrounding states sky rocking. For example, the properties that I bought in mountain states, their appreciation rates are even higher than California.

That said, California is still one of the best state for real estate investing, if not the best. Because California still has the most severe supply shortage. You have a vacant property in Texas needs several weeks to fill it in while in California it takes hours.

Also, no matter where you invest in, you can always find large number of buyers from California, not only because California has the largest population base, but also because they have the money. You have a property of worth of $2m in California, it is easy to pull off $1m to invest in other places. While you know how long it had taken me to accumulate my $40k downpay for my first rental property with my salary in Texas? It took about 10 years, Got it?!

@Marcus Auerbach   Great post. That's why as a long time OOS investor myself, I mainly invest for appreciation.

 My old post:

As an Out-Of-State Investor for 9 Years… (biggerpockets.com)

@Mel Hayes

Maximize  cashout but keep enough cash reserve,  how much cash reserve to keep depends on your comfort level.  Having enough cash on hand so you can deal with any unexpected events, also you can act quickly if there's opportunity.

Never never sell a California property, unless Prop 13 is revoked.   

Be patient, rent will catch up with price increase.  I once bought a rental property in Cental Valley of California for about $100k at the bottom of the financial crisis, at that time rent about $1000/per month.  When the price was tripled the rent was still $1300/per month, I lost my patience and sold it.  Just after I sold it, the rent suddenly leaped to $1800/month, and right now price is about $400k.  I do not regret the $100k price increase but I do regret the $1800/month rent. So be patient.

 Hi Nicholas, thank you for spending so much time helping others and you have answered several of my questions and they are very helpful. I really appreciate that. 

I tried to read all of your past answers for other people and have learned a lot. But I have some doubt about this answer.  To my understanding, if it is repair, no matter how much, even if it is over $2500 de minimis safe harbor limit,  we still can deduct it directly.  What the safe harbor means is, even if it is an improvement, but if it is under $2500, we still can deduct it as expense.  It is not the other way,  not saying that if it is a repair and over $2500, we must capitalize and depreciate it. Am I right, and Could you please clarify it?  

Again, thank you very much!

Does anybody here know Fannie mae or Freddie mac's rules on whether can use projected rents of unfinished property for DTI?

For example, if I want to refinance property A but I also have an unfinished property B with construction loan. Can I count the projected income of property B as my income?

I know a few lenders can do that but most lenders can not do that. So what’s Fannie mae or Freddie mac’s rules on this? I just cannot find that information online.

Thanks!

I agree. The new format provides far less content than the old version.  Some of the features that I like in the old version but missing in the new version include: Latest post timestamp, author, go directly to the last post, etc.  

One feature I specifically love is sorting by post numbers.  I found the topics with most posts usually are the most informative but now there's no way I can find the topic with some of the most posts.

The web page push feature looks cool but produces redundant information,  some posts appear several times and looks unorganized. 

Also, we still need the pull-down menu for each category instead of another extra step to reach each category.

@Stevan Franeta   Thanks, but Sec 179 can offset W2 income, right? If my renal income is negative but I have W2 income, I can still use it, right? 

If you do not have long-term stock loss or other property sale loss to offset capital gain, what I did last year were: sold one property with capital gain, then bought another bigger one with cost segregation and bonus depreciation to offset the capital gain, and paid zero tax.   

Hi Stevan, seem like that only applies to commercial buildings and not residential buildings.  

According to  IRS Publication 946:

Any of the following improvements to nonresidential
real property placed in service after the date the non-residential real property was first placed in service.
1. Roofs.
2. Heating, ventilation, and air-conditioning property.
3. Fire protection and alarm systems.
4. Security systems