All Forum Posts by: Colin Reid

would married-filing-separately make sense? Probably a question for our tax accountant.

The problem I foresee is that our combined income is not likely to drop below the threshold as long as my wife is working. By the time we can actually deduct all those losses, they could be more than we can really deduct (can't deduct below zero).

That's ok, though. These are good problems to have in my opinion. It means we make a lot of money. Our tax bill this year was insane by my standards, especially since it was our first year filing jointly, and my taxable income was artificially low due to my military service. We'll have these problems through the 2018 tax year, but after that I have the option of going into real estate full time, and that's looking like a better and better option. 

my first question is how are you analyzing these deals? One of my rentals doesn't quite make the 1% rule, but COC (counting principal pay down) is pushing 25%.

We've done this several times. I bought my first home with a VA loan, lived there for a couple years till I got orders, and rented it out. My wife bought her first home with an FHA loan, refinanced to conventional with a big down payment she saved while living there, and rented it out.

Bottom line, the low down payment programs are a great way to get into REI if you're patient. Assuming your income grows over the years, and your properties cash-flowing, it grows quickly over time.

We analyze all our prospective purchases like rental investments  now, even if we plan on living in them. That ensures they'll cash-flow when we move out.

Welcome! I wish I had your ambition at your age. 

I was given the book The Millionaire Real Estate Investor, by Gary Keller. It's a great overview of the many methods of investing in Real Estate, and along with Hold, another Keller book, really put me in the mindset of REI.

Good luck! I'm still new to this with only five properties including my residence, but if I can help, hit me up.

welcome to real estate. I'm also a full-time W2 and part time investor. 

Geographically, I'd say go where you'll be happy living. It sounds like you plan to move somewhere and invest in that area. We prioritize our own happiness (otherwise, what's the point of all this) so once my military commitment is up, we'll be going coastal. That's where we are happy. People make money in real estate everywhere. 

Once you have a region in mind (maybe you like mountains, or coastal, or quiet towns in flyover country) then do the research on good areas in that region for investing.

We also like what I call a modified BRRRR. We have 5 properties and live or have lived in 4. That means we have nice, cheap owner-occupied financing on them, largley eliminating the refi step. We also don't mind fixing a place up while we live in it. That helps us really know the house inside and out. Buy-reside-rehab-relocate-rent. That model will be changing once I get out of the military, but has really worked for us starting out.

all my tenants arrange for their own utilities. Some of the utility companies have programs for landlords to easily switch the account back to the owner's account during vacancies. Other than that, it's on the tenant. I don't have any properties on oil, but I don't see why it should be any different based on the fuel source.

Wow. I knew simply getting my license wouldn't bring the official status, but I didn't know there were so many sub-categories. 

So bottom line is as long as I have a full-time job that is not real-estate related, we cannot take any of the tax advantages of owning rental real estate?

I have a question about Real Estate Professional status as it pertains to taxes. I've been an investor for about 4 years since I moved out of my first home and rented it out. Since then, I have bought two more homes, one being my primary residence and one a pure rental I've never lived in. I got married in 2015 and my wife brought her first home, now rented, to the portfolio. With properties across three states, we decided to hire a CPA to do our taxes. He told us that due to my wife's high income, we cannot deduct our rental property expenses unless one of us (me) becomes a Real Estate Professional, devoting 750 hours per year to real estate. I've never heard this mentioned on the forums, or in any RE books or other media for that matter. I am working on getting licensed but I had planned on using it for referrals only, due to my job being fairly demanding and rigidly scheduled. I'm active duty military and don't have the option to quit for another two years.

Trying not to start a new thread, but I'm looking to change my property manager in Abilene. I have one SFR there and my management company does not communicate up to my standards. Does anyone have a recommendation?