All Forum Posts by: Matthew Creel

Good Morning! @Larry Smith @Matthew Hoover  Have either of you tried Thomas and Land Real Estate Group in the past?  My partner and I are both from Prattville and actively invest in that area.  Our agent is Melissa Land with the above mentioned group and she has been phenomenal in our experience.  We currently fix and flip houses but I do know that they manage a number of rentals for other investors.  One such investor is a colleague and friend and I have heard nothing but good things from him about the way they manage his rentals.  I've shared a link to their website below.  If you would like to contact her directly let me know and I will share her info with you as well.  Best of luck to you both!

https://thomasandlandrealty.com/

Anyone willing and able to breakdown the total costs associated with obtaining a real estate license and access to the MLS in the State of Alabama?

Good Morning BP Members!

Does anyone have a spreadsheet template for tracking deals analyzed that they really like and would be willing to share?

Thanks so much, 

"The meaning of life is to find your gift, the purpose of life is to give that gift away." - William Shakespeare

@Adam Byrne How is this payment being recorded on the LLC's books when paid? I assume it's being recorded to management expense. If for some reason it is being shown as a distribution to owner you could be subjecting yourself to double taxation by issuing yourself a 1099 given with an LLC you are paying tax on your portion of the total net income every year. As for the S corp election there could be tax benefits to electing S in the way of employment tax deductions for the company if salary/payroll is paid and a reduction in self employment taxes for the passthrough owners. You would definitely need to consult your CPA to discuss all the particulars before making that election. Also, if that is route you decide to go you would need to make that election before 3/15 of the current year to have it apply to all of 2019.

Currently reading Anson Young's book and I really like the idea/process of focusing on and farming a particular area.  I want to begin as he suggests by establishing a baseline for a neighborhood or zip code.  Whats your favorite way to accomplish this?  And does anyone track sales in their farm area?  If so, what info do you like to track? And in what format? Excel or some other software?

Thanks ahead of time for the help!

Everyone,  thank you so much for all the responses and valuable insight!  These are all great talking points.  Please keep the responses coming.  Thanks again for all the help.  

In talking with a close friend of mine about my personal real estate investments in 2018 he informed me that he and his wife are seriously considering investing in real estate as opposed to funding a 529 plan for their children's college educations.  He is looking at a 15 year timeline give or take.  I thought I might pose the question here for some well informed opinions regarding the pros and cons for each.  What should they consider in making the decision to fund a 529 or buy real estate?  

Thanks ahead of time for your thoughts and opinions.  

Your capital gains rate will depend on your level of income for the year (see below).  The realized gain that will be recognized and taxed will be the final sales price less your "adjusted" cost basis less any selling expenses you incur.  The adjusted cost basis will generally be your acquisition cost plus and capital improvements less any depreciation taken. You mentioned repairs in your post.  Those are generally deducted in the year incurred and are not an addition to your cost basis.  

2019 Capital Gains Tax Brackets

In regards to depreciation.....If depreciation has been taken on the property in the past you will "Recapture" that past deduction in the year of sale and it will be taxed at a 25% rate instead of the applicable capital gains rates you see listed above.  

@Benjamin Forest See excerpt from a publication I received just an hour ago.  I hope this helps!  

"Is Schedule E rental income eligible for the 20% pass-through deduction?

Final regulations provide limited guidance, but IRS gives a safe harbor.
The new tax break applies to qualified business income from a trade or business.
The final regs continue to refer to the standard under federal tax code Section 162,
the statute that generally governs the deductibility of trade or business expenses.
Unfortunately, this standard is somewhat unclear in the context of a rental activity.
That’s because it’s based on facts and circumstances specific to each taxpayer.
Among the relevant factors: Type of property leased (commercial or residential),
extent of day-to-day involvement by the lessor or the lessor’s agents, lease terms,
number of properties rented and other ancillary services provided under the lease.

The safe harbor applies if at least 250 hours are devoted to the rental activity
by the property owner, employees or independent contractors in a year. Time spent
on repairs, collecting rent, negotiating leases and providing tenant services counts.
Hours put in for arranging financing, constructing long-term capital improvements,
and driving to and from the real estate aren’t included in the 250-hour standard.

If the 250-hour test is met, you can treat the rental as a trade or business
for purposes of the 20% pass-through deduction. Separate records and bank accounts
must be maintained. For post-2018 years, contemporaneous records must be kept
that detail the hours, dates and description of the services, and who performed them.
The safe harbor doesn’t apply to property that is leased under a triple net lease
or used as a residence for any part of the year by the lessor or the lessor’s family.
Notice 2019-07 has details on the safe harbor, including how to claim it."

The Kiplinger Tax Letter (ISSN 0023-1762)

This correspondence does not establish an attorney-client or accountant-client relationship