All Forum Posts by: Logan Allec

@Ben Payano Have you treated posting in various Facebook groups?  Just do a Facebook search for "san diego housing" or something like that.  Join these groups, make a post with some great pics and a solid description of the property, and I'd be surprised if you didn't get some interest.

@Israel R. Is the property you're thinking of selling in California?  If you're 1031ing California property into non-California property you need to watch out for the California clawback.  The gist of it is when you sell your out-of-state replacement property (assuming it's in a taxable transaction) you have to pay California tax on the gains generated on the California property and of course (depending on the state) pay tax on the same gains to the other state.  You have to file FTB Form 3840 every year to track it.  Lots of folks miss this.  However there may be an opportunity to utilize tax credits to if not eliminate then mitigate some of the double taxation.  Good luck!

Welcome, @Patrick Bartlett!  I originally hail from Riverside and spent some time running around Horsetown USA as a youth.

Welcome, @Esther Li  Always good to see other Los Angeles-area investors!

@Josiah Jenison @Brandon Gedalje @Richard Bull @Matthew Fitzgerald Please keep me in the know!  I am in Valencia and would love to start attending a local meetup after April 15th!!!

This was a great podcast!  Thank you, @Amanda Han and @Brandon Hall!

@Brandon Hall I have one question for you.  At 22:00 you gave an interest limitation example of you and your dad, just you and him, forming an LP with your dad as the 50% money guy, i.e., not involved in managing the business.  I'd assume that if it's just you and him, and he's the money guy, then you would actually be running the business.

I'm thinking that if you, as his son, actively participate in the management of the business, then his interest would not be treated as a limited partnership interest for purposes of the interest limitation rules and so you would not be treated as a tax shelter and so the interest limitation would not apply.

I could be wrong, but my reading is that the definition of "tax shelter" under Section 163(j)(3) (the interest limitation section) refers to Section 448, and 448(d)(3) refers to 461(i)(3), which gets you to 1256(e)(3), which says that an interest in an entity shall not be treated as held by a limited partner for any period if during such period such interest is held by the spouse, children, grandchildren, and parents of an individual who actively participates at all times during such period in the management of such entity (1256(e)(3)(C)(ii)).

Thoughts?

Welcome, @Rebecca Ricker.  Good to see other LA-based investors.

Welcome, @Chris R.

SoCal can be a tough nut to crack for newbies.

A couple years ago I mailed out lots of letters to homeowners in LA County with no luck.

Then I tried rural Kern County and got a deal from a distressed homeowner in California City.

The margins were not as large as they would've been in LA or OC, but I was able to rent it out for 2 years before fixing it up and selling it for a decent gain.

Also, have you considered an owner-occupied small multifamily for your first deal?

You only need to put 3.5% down, so cashwise it won't get in the way of other real estate goals you may have.

My first deal was a 4-unit up I bought with FHA 3.5% in Santa Clarita.

I lived for free (as opposed to paying rent) + enjoyed cash flow + built equity. It was a great investment (and still is).

Good luck!

@Thomas Kwan Form 3500 is one-time.

Assuming the exemption is obtained, then as far as annual FTB filing requirements go, consult with your tax professional regarding Form 199 (or 199N).

@Thomas Kwan Make sure you complete FTB Form 3500.  You must receive the approval letter back from the FTB before relying on the § 23701x exemption.