All Forum Posts by: Jim P.

Just 2 months ago, Kislay was caught using ChatGPT to generate his answers to tax questions in a a "ask me anything" post just like this one.  He was copying and pasting answers directly form ChatGPT.  I thought he had been banned from BiggerPockets for doing that, but I guess they just locked the thread and that's all. https://www.biggerpockets.com/forums/51/topics/1155771-seaso...

By the way, there was a comment where someone speculated that his answers were the same as ChatGPT because ChatGPT learned the answers from his post.  That's not possible because ChatGPT's training data only has online data from 2023 and earlier.  

And here he is doing it again. I think some of his answers this time may be is own real answers. But I took the question about "passive income from NNN" and copy and pasted the question into Bing AI (which I think uses ChatGPT 4), and the answer it gave me was in part identical to Kislay's answer. Including phrases like "let's break this down fundamentally and step by step". He again copy and pasted the answer from an AI bot.

Anyone can try it if they want.  Each time you ask the question, it the AI will give a somewhat different answer, but you should see that enough of it is identical that it's clear that he copied the answer from the chat bot.

The last thread he did, he copy and pasted every answer from AI. This thread he seems to be answer some questions himself possibly, but still using AI for a lot of the content of the answers. By the way, I think that's also why he didn't have a clear answer to the straight forward question "Can bonus depreciation be applied to a foreign STR?" The answer is it can't. But ChatGPT also gave a similar rambling answer with similar phrases like "you'll need to investigate the tax laws of that specific jurisdiction".

Ok, I wasn't going to say anything, but this thread just keeps on going.  

The answers in this thread are being generated with ChatGPT.  As soon as I read the first answer, I could tell immediately it sounded very much like a ChatGPT answer.  The answers are nicely worded, but they're also generic and often are missing key information in response to the question that a tax professional specializing in real estate would likely know to mention.  

Just to check, I copied and pasted some of the questions in to the free version of ChatGPT 3.5, and I got back answers that included nearly identical responses.

Here is an example from an answer that the CPA replying to this thread posted:

Congratulations on your house hack! It's great that you're thinking about optimizing your tax situation. Here are some steps you can consider:

1. Depreciation:
   • Residential rental property is depreciated over 27.5 years. You can deduct a portion of the property's value each year to account for wear and tear. The land value is not depreciable, so it's important to allocate the property's value between the building and land. This is typically done based on the property's assessed values.

...

Starting to work with a CPA early in the process can help you set up good financial habits and ensure that you're taking advantage of all available tax benefits. They can also provide guidance on structuring future real estate transactions for maximum tax efficiency.

Here is a snippet from what I got when I copy and pasted the question he was answering into ChatGPT 3.5:

Congratulations on your first house hack! It's great that you're already thinking about optimizing your tax situation. Here are some considerations, but keep in mind that tax laws can be complex and subject to change, so it's advisable to consult with a CPA for personalized advice.

1. Depreciation:
   • When you own a rental property, you can depreciate the cost of the property over time. This includes the building and any improvements. Land, however, is not depreciable. You can use the Modified Accelerated Cost Recovery System (MACRS) to calculate depreciation.
   • Residential rental properties are depreciated over 27.5 years. For example, if your property (excluding the land) is valued at $275,000, you can deduct approximately $10,000 per year ($275,000 / 27.5).

...

Remember, tax laws can be intricate, and your personal circumstances may affect how these rules apply to you. It's crucial to work with a qualified CPA who can provide guidance based on your specific financial situation and local tax regulations.

I don't know if Bigger Pockets has a policy on people using AI to generate answers to questions.  But it seems to me, if someone is doing that, they should at least disclose it. 

Your property value increase is not the same thing as what your tax increase will be. We don't yet know what the tax rates will be, but I think there is a good chance they'll reduce it at least somewhat because the budget shouldn't need to grow by as much as property values have. And I think they actually can't increase the tax income that much because of a recent state law. But I'm not certain about that. 

@Jabbar Adesada

When we were renting it by the room we found most of the prospective renters on Facebook Marketplace.  We also listed it in the past on Zillow, Zumper, Craigslist, etc, but when it's by the room it seemed to only get any leads on Facebook Marketplace.  Is there a better place to advertise when renting by the room?

Yeah we have a 4 bedroom house near ACC and not far from UT, but I just haven't seen any price premium by renting it out by the room.  It was difficult to find renters willing to pay $675/room (and almost no one at $700/room).  But we could easily find people to rent out the whole house at $2800/month (which is $700/room).

I'm curious how the numbers are different for people who say they have been able to make more by renting out houses by the room.

We're still keeping our rents the same for the tenants who are staying (except an increase in January to cover increased property taxes costs).  It's nice to know there is the potential for higher rents the next time we have a turn over.  But it is also a little concerning that Austin is become so much less affordable for not just home owners but also for renters.  

If they're good tenants that you want to keep, I wouldn't increase it more than $50-$100, pretty much regardless of what the market rent is.  It's just not worth raising it to the max and having them not stay as long and then dealing with the hassle of a turn-over, vacancy, tenant search/lease process, and rolling the dice on possibly ending up with a bad tenant.  If they're problem tenants I would raise it to the market rate, or just not renew it.

Really, I would also consider the soft factors like what their job and financial situation is.  If it's a family where I know that extra couple hundred per month means a a much bigger deal to them than it does to me, I would also then be more likely to not raise the rent on them.  I know there are some landlords that use excuses like "it's just business", but if you're dealing with human beings, business relationships don't give you an out to disregard all normal moral obligations.  If you're doing just fine with your finances and they're good tenants and good human beings, I would probably not jack up their rent to the maximum possible just because I can.  That does tend to pay off as well when there's mutual respect and they tend to be more likely to stay longer and treat your property with more respect also.

Thanks for the reply.  I guess I really don't understand what it is then.  If the tenants don't get subsidies, why is it a government funded program?  What is the purpose of the program?

I own a rental property (a single family house) on a street where they're building a large "HUD 221(d)(4)" multifamily housing development across the street from the house. It's a nice up and coming centrally located neighborhood with high property values that can attract high end tenants who are willing to pay for the more high end housing.

I'm wondering what this HUD housing will likely be, and will it affect property values on the street? Is this a "housing project" for low income renters that may scare away some home buyers / renters and lower property values and rental income around it?

Well, yeah, that's not as simple as I had hoped.

In general, should I be doing anything else to take advantage of its CM2 zoning?  It's just about in the middle of the most active part of SE Belmont, not right on Belmont, but on a side street, just behind the lot that has frontage space on Belmont.  It's not a large lot (same size as the residential lots in the area), but should I look into partnering with a developer who could turn it into something that takes advantage of that zoning?  Or does it make more sense just to leave it as a residence?