All Forum Posts by: Michael McDevitt

Hi @Spencer Wetmore!  i can relate, as I spent several years in a Big 8 CPA firm (back when there were 8 instead of 4!), so I know how busy you are at work.

My advice is to do as much REI activities as you can, with your current schedule. Don't expect that you can do 40 hours a week in REI, when you have to do as many hours as you do at work. You are young and have many years of REi ahead of you. Good luck!

I am a CPA and I wouldn't write off the trip (or any part of it) if I didn't own property there already.  If you did own property, you have a good argument for writing off the travel to maintain it, rent it out, etc.

Set it up in the state you plan to have property(ies). Note, that an LLC owned by a foreign owner will have some special tax rules. The LLC is required to withhold US taxes for the foreign owner. Hire a CPA to walk you through the details. Make sure the CPA has experience with foreign owned LLCs, as some of my fellow CPAs are not aware of these rules.

It is tough to compete against a cash buyer.  Even with a lower price, the incentive of all cash with no loan required and usually a quick closing, is hard for a seller to pass on.  Put yourself in the seller's shoes - which would you pick and why?  Knowing that will tell you how to adjust your offer to compete better.

@Rigo Medina, i am a CPA.  I think you have gotten some mixed up advice and possibly misunderstood some things.

- If you sell a property after owning it for more than 1 year, you pay long term capital gains tax, rather than short term capital gains tax.  The first is a lower tax rate.

- Yes, you will pay long term capital gains tax on the rental property.  Did you depreciate the rental?  If so, your gain may be higher than you think.  Did you have a CPA prepare your tax returns?  If so, contact him/her to discuss.

Before i close, I make a list of everything that needs to get repaired, replaced, or changed out.  From that list, I decide which things I will do and which I will hire someone to do.  With my latest property purchase, I did a lot of the small stuff and hired a contractor to rebuild the deck on the back of the property.  I took three weeks from closing until it was ready to list for rent.

I don't know, I would rented to them, assuming I felt comfortable after meeting them.  Of course you can't qualify them, if they just moved here from China.  You are taking a risk that they could never pay you another cent or that they could wreck the place.  Those are all concerns, but you have the same concern over  anyone you take on as a tenant.  One the other hand, a year's rent + 2 month security deposit sure is a lot more than you get from any new tenant, which offsets the risk.

I would have them all run their checks, if they want to be considered.  I wouldn't feel bad about that at all.  I would tell each one, that there were several possible tenants and you would choose the best qualified from those that wanted to spend the $35.  

Here are some possibilities:

- Bank - it will teach you about financing RE.

- Property management company - it will teach you to manage properties and take care of them.

- Construction company - fix and flip & rehab training.

- Real estate agency - work those RE deals!

It all depends on what niche in REI you want to pursue.

@Russell Brazil, for me, the reason I see two bedrooms as the most popular, is that is the most desired for two roommates.  Also, because two bedrooms are desired for a couple with one (and maybe two kids).