All Forum Posts by: Bob Dreher

Hi Kyle,

Welcome to BP. I am new to participating but not new to RE. I am from Marin and work in PE RE . Best of luck in your journey!

You have gotten some good advice as to locations in which to look. Another option may be in the North Highlands area, which is a working class neighborhood. But, be very careful as there are good and bad areas within this concentric circle.

Best of luck in your pursuit!

I have just gone though the exercise of a 1031 to buy and rehab an REO property. There is a lot of discussion surrounding intent. While the IRS does not have a clear cut holding period for 1031 timing, it is typically believed that a two year hold while renting will suffice for its purpose of deferring the gain, unless it can be argued otherwise for a shorter hold. (Intent)

And for clarification purposes, capital gains tax is up to 20% currently...plus 25% tax on recapture of cost recovery (depreciation)...plus, 3.8% Obamacare bump if income amount is large enough.

I believe flipping is always taxed as ordinary income as it is considered stock in trade, irrespective of the holding period and amount of rehab. 

I highly suggest you dig deeper to determine the cause and extent of the structural work required...this can turn a potential good deal into a total nightmare.

That said, Orinda is a solid market. Without more info, tough to say yay or nay!

Hi Anthony,

Sacramento is a great market which is currently treading water. Your timing may be very good. The one caution I would give is that there are some very good areas and some incredibly dangerous areas in which to invest. 

However, being your first investment, I may suggest you do a lot of due diligence to know what and where you are buying. While an architectural tour of a neighborhood may be a fun thing to do on a sunny Saturday...know that looks can be deceiving! You may want to search crime stats for the area and maybe even go to the local police department to get an unbiased opinion of the potential area in which you are looking.

If the area passes your test for risk, next is to find out what goes on in the political climate of the complex.

There are a lot of sophisticated investors on BP who may be able to help you understand some areas you may consider avoiding as you enter the market. All I can say is "caveat emptor". I wish you well in your pursuit.

Aloha, brudda! Welcome to BP...I am fairly new myself...this is my boss's sandbox but I am committed to jumping in! I hope our paths cross.

A hui hou,

Bob