All Forum Posts by: Pathik Thakkar

This is for the bay area, and here's what I am hoping to do

- buy a fixer upper for 900k
- Cost seg - write off (675k)
- Spend 200k in improvements
- 30k in furnishings

How does the 200k in improvements play in taxes? Can i write it off in the first year?

Also is it possible to convert this to LTR or primary residence after a couple of years?
I know i wont break even in the cash flow but tax refund might be enough to cover.

@Pathik Thakkar: Your Comment: "unfortunately bay area economics along with restrictions and taxes dont make for a very friendly env"

Help me to understand. Since you know that the bay area is unfriendly to investors and is only likely to get worse, what would compel you to invest your future, dreams, money and time into such an oppressive environment? Just curious.

What you are saying makes sense, and yes I will be exploring other markets as well but just starting out in STR I feel I need to be closer to be able to manage it and show material participation. One other reason to still stay on in the bay area is to capitalize on the real estate appreciation (Tax incentives basically make it so you can hold the property for sometime for free.) Also there's a good strong LTR market and if nothing else comes to pass I could make it my primary home. (I currently rent my primary home here and have some LTR in SoCal).

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Yes, I hadn't thought of that - that's something i'd need to account for - good call.

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Thank you @Michael Baum for your responses. It would be my first STR and unfortunately bay area economics along with restrictions and taxes dont make for a very friendly env. So planning out my contingencies.

Hopefully STR is paying for its mortgage and that's a win for me but that's what I am chasing at the moment.

Any advise on STR for remote properties if i want to "materially participate" in it? is it done more often than i know?? Gets me nervous to enter a new market.

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Quote from @Michael Baum:

Hey @Pathik Thakkar, you really need to chat with your CPA on this like @Brooklyn McCarty said.

I am not 100% sure what you are trying to accomplish. You want to fix it up, STR for a short time, then flip,, LTR or move in?

I am trying to buy a fixer upper - and fix it up (Assumption is I am able to write off the improvements in first year, essentially get a discount from taxes in renovations). How long then do i have to be in STR before I can either convert it to LTR or make it my primary?

yes also looking for CPA recommendations.

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Thank you @Brooklyn McCarty for the response, do you have a recommendation on the CPA? I am pretty much starting out and trying to make sense, also 2-3 of us are in a similar boat.

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Cost -seg based on Improvements at (675k) is what i meant, land value is a good chunk here in the bay. I would hope to be able to get about 25% in depreciation.

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Also is it possible to convert this to LTR or primary residence after a couple of years?
I know i wont break even in the cash flow but tax refund might be enough to cover.

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All Forum Posts by: Pathik Thakkar

Pathik Thakkar has started 1 posts and replied 7 times.

Post: STR + Flip - does it work?

Post: STR + Flip - does it work?

Post: STR + Flip - does it work?

Post: STR + Flip - does it work?

Post: STR + Flip - does it work?

Post: STR + Flip - does it work?

Post: STR + Flip - does it work?