All Forum Posts by: Matt Ward

Originally posted by @Eamonn McElroy:

@Matt Ward CCH State Tax SmartCharts are helpful.  RIA also has a similar tool however I prefer CCH's version based on experience.  Prefer RIA for pretty much everything else including research and editorial materials.  Never been a fan of BNA....I know some people like it.

 Yep agree completely.  California (FTB) came up with a great conformity release but just saying that will be the part that takes more time than most people think, and most TPs realize.

@Eamonn McElroy state conformity will be one of the biggest headaches of the TCJA in my opinion

@Eamonn McElroy @Natalie Kolodij wow 50% to land, that's the first I've heard....  I don't typically see anything over 30% (we consider 30% to be very conservative) and that's for properties in the SF Bay Area and HI.  One step further, we'll generally see MF Properties lower, around 20% land.

@Chaim Rosenstadt when i compute your numbers above (assuming $440 mortgage includes principal & interest) I get $333 in cash flow. Vacancy and Capex are not cash out expenses, they are reserves that you should hold for when you do have vacancy or a large capital expenditure - so you have funds to pay for those items - and they will be expensed or capitalized in the year/month they occur. If you factor in ~$200 in depreciation (random number since we don't really know what your depreciable basis or land allocation is), you are looking at taxable income of $133 but you received $333 in cash.

Often times a "tax loss" occurs when you have monthly expenses that bring your taxable income close to zero, and then non cash expenses like depreciation and amortization further reduce your taxable income below zero, creating said "tax loss".

disclaimer: been working a long day today, so please feel free to fact check my math :)

@John Thedford Agree - no income tax in FL

@rachel 

@Rachel Sharp Cleveland also has one of the worst population declines over the last two decades and property values do not even keep up with inflation.  There are almost always underlying reasons why certain markets are great for cash flow and I think it's wise to consider them when looking at the entirety of your investment.  Happy Hunting!!

@Jared Aquino Hi there, while a lot of people on BP advocate for OOS state investing in the Midwest (Cleveland is very popular), I’ll just mention that we’ve found great success in CA in MF investments. I personally only invest on the west coast and stay away from the Midwest for reasons I’m happy to share if you send me a PM. I’ll also share the research I’ve done on the CA cities I’m in and the deals/returns I’m getting. In my opinion finding property that is both a cash flow AND has an appreciation play is the way to go for wealth building, and MF allows you to control the appreciation. A SFH in the Midwest may not appreciate $1 in the next 5-10 years.... Id suggest investing where appreciation can at least keep up with inflation. That said, many people are successful in the Midwest by their own definition and goals, so more power to them. This is just my view. Best of luck!

@David Waddleton we’ve actually been able to find some great MF deals in Northern CA this year... investing in CA is possible if you have the time and patience to look! Forbes recent list of best rental cities to invest in had 3 CA cities in the top 15... now that’s just some metrics and lists are just lists, but my point is folks in CA don’t have to look OOS. There are deals everywhere. IMHO

@Joanna Lenn vary rarely, almost never, should you put real estate in an s Corp. one basic reason is because if you ever needed to get that property back in your name or move it into a trust, etc, the transaction of removing it from the s Corp would be considered a sale and the s Corp would be liable for taxes from the gain, even though you’re moving it from an entity you own to yourself. NOT worth it! Several other reasons why too.

I'm in Walnut Creek - interested!

Originally posted by @Kon Zel:

Originally posted by @Matt Ward:

Originally posted by @Kon Zel:

Originally posted by @Matt Ward:

Originally posted by @Kon Zel:

Originally posted by @Matt Ward:

@Jesse M. You may want to look into REITS... stock price doesn’t fluctuate much and they’ll pay a good dividend, and it’s liquid. Within REITS you can decide how risky you want to be as well. Just another option.

 To say that REITs are liquid and price doesn't fluctuate is a joke.  They trade based on their NAV which can move with real estate prices and/or rates.  As an investment, they're a good arrow in your quiver but its an investment, not a cash holding.  There is definitely risk associated with holding them.

Not to pick on you Matt, but this is one of my biggest pet peeves.  People ask for short term holding (cash) recommendations and people chime in with syndicated loan funds, REITs, etc.  Literally anything else but actual cash holdings.  Yeah, we're in a benign credit environment and defaults are near historic lows.  Doesn't mean its time to treat investments that may lose value as cash.  

 I didn’t say they don’t fluctuate - I said they don’t fluctuate much, which as a broad generalization is true compared to other securities.  Obviously they are not as liquid as cash, but as I mentioned it is an option that has a better return than cash holdings, and you can dispose of your shares any time you want (vs a syndication - which you mentioned, not me).  If you want to extrapolate something from peoples post here to fit your agenda or create a narrative to discuss your pet peeves, do it with someone else.  

Syndicated bank loans != syndication.  I do this for a living and am very versed in fixed income products.  If people are looking for short term holdings, capital preservation is #1 priority.  Meaning instruments that will not lose value.  You literally can not get more risk-free than UST.  

At work, we define short term as anything having a final maturity of less than 12 months from settlement.  Meaning that CP, T-bills, repos, etc.  Anything that doesn't fit in that bucket, is a long term holding.  

Before getting defensive, learn the terminology and market. 

 Again, you are supporting your agenda by miss-representing what I said.  At no point did I say REITS were risk free nor did I say they don’t fluctuate in price.  I simply presented another option for the OP that hadn’t been mentioned before.  If you want to nit-pick comments here to look smart, so be it.  I wasn’t selling REITS as the way to go, the way you are pushing your “expertise”.  

 Matt - what agenda am I pushing?  You stated that REITs didn't fluctuate much, a very subjective measure.  So yes you presented an option, even though the question asked was about something else.  

If I ask for recommendation on fruits and someone chimes in that potatoes are great.  Yes, they presented an option, but it doesn't answer the original question.

I'm not peddling my expertise just relying on it to answer the intended question.

Other people suggested things like paying down a mortgage or solo 401ks but you didn't jump at them... then when I said REIT prices "don't fluctuate much" you chime in and reacted as if I said they don't fluctuate "AT ALL". You responded to words that I never said... the reason for I still can't understand.... other than to perhaps use it as a platform to (as you say) peddle your expertise based on a pet peeve for something that I did not say. I appreciate this conversation and hope you can see my point here. Respond to exactly what people say, not what you were hoping they said.