All Forum Posts by: Logan Allec

Hi @Dave Smith, depreciation is not a cash expense, so I wouldn't include it in cash flow projections.

@Ariel Robinson, welcome!  I'm just a little north of you in Santa Clarita!

@Joy Sanchez I will say that it's tough to do in LA proper.  To make the 2-4-unit "house hack" work in SoCal I had to go "off the beaten path" geographically...it was a small sacrifice since I worked in Downtown LA at the time but it has paid off in the end...

Welcome, @Renelyn L.!  I'm in the 661 as well out here in Santa Clarita.

Welcome, @Joy Sanchez!  Always good to see other LA-based investors.

@Andy Bondhus, I would direct him to §4.03 of Rev. Proc. 2010-51.  Interest on an automobile purchase (to the extent of business use of course) is included along with parking fees, tolls, and taxes as a "separate item" distinguished from the "fixed and variable costs" described in §4.02 that are not deductible when using the standard mileage rate.

The theory here is that the "standard mileage rate" is the sum of "fixed and variable costs" such as depreciation or lease payments, maintenance and repairs, tires, gas, oil, insurance, license/registration fees, etc., on a per-mile basis.

However, this "standard mileage rate" does not (theoretically, of course) include the "separate items" of parking fees, tolls, interest, and taxes, and so these may be deducted in addition to taking the standard mileage rate.

Also, I assume your car is relatively old or inexpensive such that the standard mileage method makes sense as opposed to the actual expense method?

@Christopher Phillips is correct that generally one may not deduct "actual" expenses when using the standard mileage method, but there are certain exceptions to the rule as described above.

@Emi M., my one-way commute went from a 20-minute subway ride to a 90-120-minute ordeal involving car, train, and subway. The major factor was the price, which by extension meant that the property would cash flow, even with me living in one of the four units (though I did have to rent out the bedroom in my unit to get that cash flow while living there). I had been searching in Los Angeles proper for a while but was getting beaten by cash offers way over asking nearly every single time, so I decided to expand my search radius. When I was willing to accept that I may be living on the fringes of civilization, I found the property rather quickly on the MLS.

@Emi M. to make the 2-4-unit "house hack" work in SoCal I had to go  "off the beaten path" geographically...it was a small sacrifice since I worked in Downtown LA at the time but it has paid off in the end...good luck.

@Susana L., your life is obviously going in the right direction...mine on the other hand...

@Susana L., welcome!  Fellow accountant, past OC resident, and current Santa Clarita resident and investor here!