All Forum Posts by: Kelly O'Keefe

Hi @Karen Kushner

There while I do not know the specifics of your situation I can answer generally 

1. The property needs to be placed in service before the end of the year and this will allow you to benefit from a cost seg

2. Was this property your primary residence? 

3. Land cannot be depreciated but the building, land scaping and other capital expenses can be. 

4. Bonus depreciation allows you to take all depreciation for items with a useful life of less than 20 years in a single year. The remaining Items will be depreciated based on the life span of the item and according to the depreciation schedule 

5. A cost segregation study breaks the property into smaller pieces based on useful lifespan and shows what can be taken on an alternate depreciation schedule. Without a cost seg the property will remain on straight line depreciation. 

Your strategy is possible but I would still recommend speaking with a CPA to ensure you understand depreciation recapture and intricacies of a 1031

Hi @Karen Kushner

There are going to be a few differences. One of the ones to be considerate of is the limitations of taking losses as a W-2 earner. The max you can offset for a LTR is 25k and this is phased out based on your level of income. Because of this limit the cost segregation and bonus depreciation on a LTR may not be as beneficial without real estate professional status. In the short term rental loop hole there is no loss limitation and that has the potential to be your best option for offsetting W-2 income. The IRS also sees a difference between STR and LTR and these cannot be grouped for material participation.

I would also highlight that the 100 hour rule is also based on having more participation than anyone else. If you have cleaners or anyone else working on the property you need to make sure to show your participation is higher than there's 

Awesome, Following!

Correction: I said "Development/Redevelopment" and should have said "Construction/Development"

Hi @Tim Rogers

I don't know the specifics of your situation, but it sounds like you are in the "Development/Redevelopment" qualifier of the REPS. Qualifying for REPS does not automatically mean you can offset income, you need to have material participation, at least a 5% ownership stake and an amount at risk. 

To my knowledge, STRs do not qualify for the real estate professional status as they are seen as a business venture and not real estate activities (this is why it is a "loophole"). It may be simpler to pursue the STR loophole strategy as there is no limit the losses used to offset your W-2 income. With LTRs there is a 25k loss limitation that would be phased out for high income earners. I believe this was the loss limit @Chris Seveney referred to. For the STR loop hole and REPS there is no limit to the losses that can be used to offset W-2 income.

Hope this helps

I would also look into Jacksonville and Fayetteville. They have to large military bases that leads to a high number of individuals looking for LTRs. In general military orders tend to last 3 years and so a large number of service members choose to rent instead of buy. They also receive basic housing allowance from the government. As a result there is less risk of renters being unable to pay their rent. 

If you are interested in the triangle, I would recommend speaking with @Avery Heilbron. He is well tied into that area and could answer your specific questions 

Hi @Pamela Guillen

I currently live in NC and there are some really great opportunities. I also think it is highly dependent on the area you select. From your post it feels like you are referring to the main hubs such as the triangle (Raleigh area) and Charlotte. Other real estate investors have also been very successful in areas such as Fayetteville and Moore County renting to military service members or even short term rentals supporting the PGA tour. Asheville is another area that could be attractive for investing. I would recommend highlighting a specific area and then getting in touch with the local REI group. I know of a couple that I could put you in touch with.

Best of luck 

Hi @Brent Logsdon

What do you need the software to do for you? For example, do you need the software to collect tenant payments or are you looking for something to track depreciation expenses?

Hi @Rebecca Busch I am local to NC and we offer basic courses on real estate taxes. Are you looking for in person courses? Im also looking for real estate meet up groups in the area to join if you know of any good ones!

But to be fair there are several tax professionals on bigger pockets who would be able to help if you are willing to work remotely. 

 Yep just messaged it to you