All Forum Posts by: Kelly O'Keefe

@V Reddy

First, setting up an LLC to invest in real estate is generally to limit personal liability and for asset protection (select "magnifying glass icon" in top-right corner and search "LLC", you'll get a lot of feedback). In the case of a syndicate, the LLC and its operating agreement help to formalize the legal relationship between investors. Do each of the individuals investing in the syndicate need their own LLC? It depends on the syndicate and your personal preference.

You don't need an LLC to write-off legit business-related real estate expenses.

Based on what you said, I'm going to assume that you aren't the person responsible for coordinating and filing the taxes for the syndicate. This also includes making sure the K-1s are distributed to investors. - let me know if I misread this. The syndicated LLC tax returns should not be filed on TurboTax.

Yes, you need a CPA/EA to understand your responsibilities as a GP of a syndicate and also the tax optimization strategies that may be available to you, or not available in the case where you are an LP.
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*This post does not create a EA-client relationship. The information contained in this post is not to be relied upon. Readers are advised to seek professional advice.

Hi @Kayl Kam

1. When looking at out of state STR Loopholes the IRS is more likely to question how you are materially participating and managing the property. Generally, out of state owners have property managers and other ways of managing that makes it extremely difficult to meet material participation requirements. Within the IRS technical audit guide they specifically highlight being several hundred miles away from the property as a potential red flag.

It is possible to meet material participation requirements, I would just make sure you are keeping immaculate records and can show how you have made it possible. 

2. I cannot answer but I am sure an investor group in the area would love to help. 

3. My last Airbnb stay was in the mountains of Asheville and had a sauna and private/natural hot tub and fire pit. I think the location was fantastic as it was not in an urban environment and allowed for a peaceful getaway. In the past I have booked airbnbs for family holidays as more people are able to stay in one space and it provides a more intimate space. 

Initially the prices were lower, but lately the rate has increased. I would focus on decor and amenities that also take advantage of the location.  

Hi @Nathan M kiefer

That is a little odd. If it was a good experience on the first property I would expect the same again. Have you tried contacting the main office or different individuals in the company? 

If you need it, I have few contacts for other companies that would be able to help. Shoot me an email and I can send them over. 

Best, 

Hi @Ozgur Cebe 

There are a few options for cost segregation based on the property and your goals. These can include inputting your own information and getting a cost seg in 15 min, or having an engineer come to your property and make a more detailed study of your STR.

If you are interested I have a few companies we have worked with in the past. If you message me, I can send you the contact info 

Hi @Kathleen Rogers

REPS is a very powerful tax strategy that can offset W-2 income. However, STR will not count towards REPS. You can still take the STR Loophole which will have a similar strategy to offset taxes. Depending on the amount that is offset it could be beneficial even if the property has a low cash flow.

Hope this helps 

Hi @Kiran Yella

I would recommend talking to @Avery Heilbron He is an investor and realtor in Charlotte and the triangle. He also runs a REI meetup group and as is well versed on all aspects of investing in NC

Hi @Tony Nguyen

This is true but also is going to have a a few contributing factors, such as the type of rental and how much you are engaged in running the property.

It sounds like your research is specific to LTR properties which do have a cap. Real estate professionals are not subject to this cap if they qualify 

Hi @Matthew Kauk

The basics seem to be there. I would make sure you are tracking your hours correctly and all of the activities you are tracking count. In general, the 100 hours tends to be the easiest to achieve but if you have 101 hours tracked and the IRS discredits 2, now you cannot offset the W-2 as planned. I would be cautious of investor hours such as research and education as these can get some investors. 

The other property can be tracked cumulatively if it is also a STR. If it is a LTR then these properties will be tracked separately.

If you file jointly then a spouse's material participation should count. 

The STR Loophole can be complicated and is difficult to summarize in a single short post. As a result I can't answer if there is anything else you are missing. If you are planning to offset a large amount it may be beneficial to speak with a tax pro to ensure your strategy will work.

One common strategy is to place the property in service by listing the property on a site such as Airbnb. Then any expenses, such as purchasing linens and furniture, can be written off. Expenses prior to the property being placed in service will not be as beneficial from a tax standpoint 

If it is a business, bonus depreciation will be available in the first tax filing if there is a cost seg