All Forum Posts by: Logan Allec

Hi @Rachel Liu.  That purchase was in 2015.  No, you don't have to put any more cash into the deal when you move out (I moved out after a year into a "normal" house).

@Josh Lonnquist Quick and dirty way is to use the assessor's values.  Search for your property at this link, and you should be able to generate a PDF of the assessor's property card that will have a separate valuation for land vs. improvements.

Also, @Rachel Liu, people do well investing out-of-state (just be careful), but 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 withFHA3.5% 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!

Welcome, @Jeff Chen

Some people do well out-of-state, but 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 FHA3.5% 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!

Welcome, @Rachel Liu

Good to see other young L.A. investors making it happen!

@Manuel Naranjo As long as you didn't use the home sale gain exclusion on another property in the last 2 years, you should qualify for the full exclusion.

IRC §121(b)(5)(C)(ii)(I) states that otherwise nonqualified (e.g., rental) use would not include any period after the last date that the property is used as the principal residence of the taxpayer or the taxpayer's spouse, so it essentially doesn't matter that it was a rental from December 2014 - June 2017 for purposes of the home sale gain exclusion since the last date you lived in the property as your principal residence was before you rented it out.

Depreciation recapture is another story.

Welcome, @Brian R.

SoCal can be a tough nut to crack for newbies.

A couple years ago I mailed out lots of letters to homeowners across 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 withFHA3.5% 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!

@Corie Carpentier This is really up to you and any landlord-tenant laws that exist in your state, HOA regulations, etc. Around here, landlords typically pay for HOA fees, while tenants pay for utilities (though landlord may pay for some to the extent not separately metered in a multi-unit property) and handle the yard maintenance themselves. I would imagine these things vary from locale to locale.

@Jim T. For LLCs, the $800 is a tax just for having an LLC. It's not based on income or anything. And then on top of that California LLCs have the gross receipts fee, which kicks in if you have more than $250k of California gross receipts during the year.

For S corps it's a little different.  California taxes S corps at a 1.5% rate but also subjects them to a minimum $800 tax.  So basically if an S corp's California income is $53,333 or less, it will only pay the $800 tax.  But if it's more than that, it will pay tax of 1.5% x its income.

And also for C and S corps, California waives the minimum tax the first year.  So if in the first year the S corp makes only $40,000, it will only have to pay $600 rather than the standard $800 minimum that would otherwise apply in a later year.

@Mary Smith You probably just want to call the FTB to see what's up.  Call the number in the image below (BiggerPockets wouldn't let me put a phone number in the text so I had to upload an image file).

Wait until the Spanish speaker speaks and the English speaker speaks again, then press 2, then 4, then 2, and you should be able to be connected to somebody or sign up for a call back (the latter probably being a better idea this time of year).