All Forum Posts by: Ken Teng

One thing to add:

Your creditor cannot lay hands on your social security and 401k. It is your other properties, like your primary residence, that are at risk.

I think there is no buy-and-hold deal at all in the coastal area in California. If you do flipping, maybe there is some chance.

@Harrison Liu There are different ways of calculating cash flow. I guess by premium you mean principle. At BP, I think people tend not to include principle/equity accumulation. This is justifiable:

1) This is much simpler, because that is the money you land in your pocket. 

2) A deeper reason is that if you want to factor in equity, a more comprehensive way is to calculate the IRR instead of cash on cash ROI, which factors in appreciation, inflation and other elements. Equity complicates things, because it is not just about principle. It is also about a lot of other factors.

No need for a 1031. Just sell it. However, the sale will eat into your profit, because you will need to pay ~10% for the related fees.

@Marco G. You are right. Deduction does not require a LLC. But consider the following scenario:

I am interested in two properties at Place A and B. I traveled to Place A, investigated, and then bought the property. Then I traveled to Place B, but after investigation, I decided not to pull the trigger.

With an LLC, it is easy to deduct both trips, because both trips can potentially benefit the LLC. However, without an LLC, you can justifiably deduct trip A against the bought property. However, I find it hard to deduct trip B. Against which property can I deduct trip B? Against Property A? They are not related. On the other hand, you do not have any property bought, thus no income directly generated from trip B. So I guess IRS won't allow you to deduct trip B.

Buy REIT (not recommended now, because they are going down). Or put the money aside in a low risk low return account, and take some time to do the market research every month. Meanwhile you can assemble your team.

I am not an tax expert, either. But you can refer to the BP Podcast featuring Amanda Han on this issue. The deduction criteria are 1) business is at least half of the time during travel; 2) business affairs arranged previous to the travel.

Yet, I still have a question. I think it generally makes sense to deduct travel and search for properties, if you have a LLC or corp. Intuitively, if you do not have a LLC or corp, it is hard to justify the deduction. Without a LLC or corp, maybe you can deduct the travel that leads to the purchase of a property, but I find it is hard to justify deducting travels that did not result in anything. Is that the case?

Are you talking about Home Equity Line of credit (HELOC)? If yes, sure it is possible. One caveat is that if your house price goes down, you may not be able to cash out, because the bank may pull your credit. However, your home is the collateral.

If you are talking about general credit cards, it is possible too (though much harder). But it is not recommended, unless you can pay it back before the APR kicks in. Those APRs are monstrous, and you do not want to sit long on them

Hi,

I just came across some properties listed by Neu Rental Estate Group in the Marketplace. Has anybody done any business with them? They seem to have a pretty good website at http://www.neurealestategroup.com/offmarketinvestm...

Thanks,

Ken