All Forum Posts by: Justin Robinson-Howe

I realize the picture of my excel didn't come out the way I intended so please let me know if any questions thanks!

Hi all!

Few questions here. I recently purchased an investment property from a family member and am just trying to help them out with capital gains tax now. The caveat there is that the property has 4 dwellings and one of the dwellings they resided in as their primary residence from June 2016 to October 2018, so I believe they should qualify for the 2 of the last 5 year tax break. They technically built and owned the property in 2004 and let their in-laws stay there until their passing in 2016, at which time they moved into the house. Then in October 2018 they moved off the property to their new primary residence and rented the house from that time until our sale in December 2015. So details on the sale are below so trying to figure out what the cap gain to record because we're having a bit of a lack of confidence in their accountant. Also, assuming the portion of the cap gain allocated towards that house is tax free, is the ~$12k in depreciation recaptured at 25%? As always I really appreciate the help of the BP community!

@Rick Pozos and @Dmitriy Fomichenko thank you both for your insight. Much more efficient to use the BP resource than find yourself in a rabbit hole on Google!

Seeking a bit of guidance on SDIRAs.

Background: I own a handful of properties in Maine and am looking to grow my portfolio. My grandmother has a sizable IRA and is becoming more and more apprehensive about her traditional investments (stocks, bond, etc.), and more and more interested in moving her funds to a SDIRA to invest in real estate.

Now from my research I understand that she cannot use the funds to be a private lender to my business, as I am considered her direct lineage. That said, there’s a bit of a plot twist in that her husband is my step grandfather in which I have no relation to. It seems to be a “grey” area with step relation, but wondering if it would be permissible to transfer funds into a SDIRA under my step grandfather and he be a private lender to my business?

In addition, I understand that my grandmother can partner on deals with disqualified persons (i.e. me). This could be a very powerful option as an alternative to continuing to grow my portfolio. But from what I see, equity split is based on capital contribution. This method seems to limit any fair equity split for being a deal finder and/or doing any of the hands on work or coordinating value add projects. So my question is, am I understanding this partnering criteria correctly? Are there ways to fairly compensate for non-capital contributions? Lastly, as for property management, can we self manage? Is she allowed to hire me as the property manager or will we need to outsource?

As always I appreciate the help/guidance from the BP community! Always an invaluable resource!

Awesome thanks for the insight @AJ Leman. I feel like it's something I will get a better feel for as I continue to pick up properties but was just curious if there is a "standard" bump investors typically see. Regardless I will just make sure to be conservative on my assumption. Thanks again! 

I've only purchased my investment properties around the tax assessed value, so wanted to hear more from the community on how they adjust for pro-forma taxes. I guess the main question is say the tax assessed value on a property I'm looking at is significantly below my purchase price, do I assume the new assessed value will rise to the purchase price? Would be interested to hear how property taxes have adjusted for the community. Thanks for the help!

Great thanks @Sheryl Sitman. I'll be sure to take a look!

I appreciate the insight @Cole Raiford!

Thanks to both @Christopher B. and @Bridgette Delva! I wanted to make sure I was thinking about my analysis correctly and needed a sanity check! Much appreciated. I'm new to BP so I appreciate the helpful navigation and will be sure to check out the BRRRR tool as well as turner's book. Thanks again!
 

Suppose I plan to refi within the first year of a rehab and rent in order to cash out my initial investment. Should I be modeling expected terms for the refi into my analysis and the impact on CF? I've come across several models but none assume a future refi. I assume if a refi pertains to your strategy you would want to adjust the model and the potential change in financing costs? I'm new to REI so just want to make sure I'm understanding the variables. Thanks for any insight.