All Forum Posts by: Kyle Spiewak

I have a single family house I am rehabbing. If I were to decide not to sell it, but rather rent it are there tax implications that I should be aware of? There have been some significant improvements (roof, new bathroom ect.)

Welcome to BP.

I would say gain all that you can from your dad and when you are at a place were you have gained experience you can create your own business plan and try it.

Read this today and thought it was interesting and worth sharing. It is from the Journal of Accountancy. If I am reading it right it is saying that there we will a 3.8% tax on rental income. Please give your feed back.

"Medicare tax on investment income. The Reconciliation Act added a new IRC § 1411 that imposes a tax on individuals equal to 3.8% of the lesser of the individual’s net investment income for the year or the amount the individual’s modified adjusted gross income exceeds a threshold amount. For estates and trusts, the tax equals 3.8% of the lesser of undistributed net investment income or adjusted gross income over the dollar amount at which the highest trust and estate tax bracket begins.

For married individuals filing a joint return and surviving spouses, the threshold amount is $250,000; for married taxpayers filing separately, it is $125,000; and for other individuals it is $200,000.

Net investment income means investment income reduced by deductions properly allocable to that income. Investment income is defined as income from interest, dividends, annuities, royalties and rents, and net gain from disposition of property, other than such income derived in the ordinary course of a trade or business (however, income from passive activities and from a trade or business of trading in financial instruments or commodities is included in the definition of net investment income).

This provision applies to tax years beginning after Dec. 31, 2012."

If you do not have a marketing plan in place that could be a good start. For example are you targeting single family, multi-unit, HOA's?

What I did was got a list of multi-unit addresses (the address where the tax info is sent) in my "farmed" area and sent them out a post card. You have to give them some incentive to respond. Mine was that if they called me within 30 days I would beat their current managers rate.

You really need to try to get the phone numbers of the list you are sending to so you can follow up with a phone call. Script out what you are going to say when you get a phone call or you are calling them. "Hi my name is ... I sent you something regarding your rental in the mail and wanted to follow up..." Then ask a lot of questions.

Rich,

Great post. How do you "live" there without owning real estate? How can you register there? Do you have to rent or own a home in order to have a phone #, DL ect.?

I read this article a few days ago. I thought the graph on Loan Resets was valuable.

http://news.morningstar.com/articlenet/SubmissionsArticle.aspx?submissionid=666.xml

Shawn,

Keep me posted on the deal. I hope it goes through.

I don't know if I am missing something, but "3% commission on both ends". Does your broker get a cut of that? If you are on a 50/50 split you might need to adjust your numbers.

Thanks for the response.

I will start on all three steps.

I have my sales license and have applied for my brokers. I have done a few deals acting as the agent; however I would like to start investing for myself.

Any good suggestions on the next step. I have another full time job and some money saved up.