All Forum Posts by: Ray Li

@Brian Eastman I looked through IRS's list of approved IRA custodians (https://www.irs.gov/retirement-plans/approved-nonb...) and didn't see any of the ones frequently mentioned here on BP, for example IRA Services, QuestIRA, uDirect, etc. Am I missing something here?

Thanks,

Ray

@Brian Eastman

Ahh ok thanks. If I just use a SDIRA Custodian for private loans, how long would they  usually take to approve the process the loan?

Thanks,

Ray

I'm considering setting up SDIRA LLC for doing private lending. Seems like that's the best way to invest that while avoid UBIT.

My IRA money is in a traditional IRA right now.

I know the main decision factor between leaving the money in traditional IRA vs converting to Roth is based on how much I expect my tax rate to be when I'm 65 vs my tax rate now. But is one of them better than the other, strictly with respect to the investment method (interest income from private lending)?

Also does anyone have any checkbook IRA LLC they recommend? I think I've seen some people using IRA Services.

Thanks,

Ray

I'm an out of state investor from California, and I'm looking to purchase investment properties in Las Vegas. I'm considering purchasing foreclosed houses, rehab them and rent them out.  I'm hoping to find a buyer agent specializing in foreclosures to help me purchase.

Does anyone know any agent that they'd recommend?

Thanks,

Ray

I'm consider investing in the San Antonio area, and I did a little research there. According to BestPlaces and Niche, 1/3 of the people in San Antonio rent while 2/3 own a house, which suggests there's little rental demand there. This is probably especially true for SFH, where the target renter demographic would probably want to settle down and own a house anyways, since the mortgage is a lot cheaper than the monthly rent.

SFH buy and hold investors in the San Antonio area, what are your experiences like? Wow long does it take for you guys to find tenants and how long do they usually stay before leaving and buying a place of their own?

Thanks,

Ray

@Nicholas Aiola Hi again. I have a few non real estate related questions, hope you don't mind.

My brother and I plan to start an LLC taxed as a partnership, where I purchase the assets and he manages it. We decided to report all income and expense 50-50, except for asset depreciation. I will report 100% of the asset depreciation, and when we sell the assets I will report 100% of the capital gains/losses.

My questions are

1) Is this structure allowed, where I report all depreciation and capital gains/losses and split everything else? If so do we need to declare this structure inside the LLC's operating agreement, or is a verbal agreement between me and my brother good enough?

2) If I deposit money in to an LLC, buy and sell assets directly under LLC's name, and then withdraw money from LLC, I only get taxed when I sell assets right? Depositing money into an LLC is not a gift, and withdrawing money the LLC is not an income or gain right?

Thanks,

Ray

Hi, I searched around for a bit but couldn't find a clear answer for this.

If I purchase a property with cash and then immediately get a delayed financing, is the delayed loan traced to the property I bought? Or is it traced to whatever I use the cash for later on?

Thanks,

Ray

@Nicholas Aiola Thanks for the response! The main reason I want to file my own taxes is that I'm interested in learning how it works, rather than just handing it to a CPA.

@Nicholas Aiola Thanks for the response! Much appreciated.

A few other questions.

1) I bought a property in late 2017 with the intent to rent, but I actually spent 2017 fixing up the place and didn't list it for rent until 2018. From what I understand, I can deduct mortgage interest and property taxes as if it's my secondary home, and add other expenses to the house basis price. Is this correct? Does IRS care about intent in this case? Does it matter that the property is in a different state from where I live?

2) Probably a stupid question, but is direct mail campaign costs deductible against rental income? I assumed it was before, but now that I think about it's not really related to rentals, since I can use direct mail results to either hold, flip, or wholesale.

3) I sold my primary residence last year. I rented out half of the house for only 3 months, and then spent another 5 months fixing up the place before selling it. My question is that am I obligated to deduct rental expenses during the first three months against the rental income? Or can I lump together the 3 month of rental expenses together with the repair/renovation expenses for the entire year and add it to the house basis price?

I know this is usually a stupid idea, because by moving the expenses to the house basis, I will be deducting against long term capital gain from the house sale, instead of the passive rental income which is taxed higher. But in this case, I will have extra rental income to help offset rental losses from other properties or activities that I can't deduct from W2 (since my AGI exceeded $150k) or capital gains.

@Nicholas Aiola Really appreciate what you're doing.

I've started buying investment properties last year, and I have a couple of newbie questions. Hope you don't mind.

1. I assume I can deduct real estate related expenses that are not tied to a specific property? For example direct mail campaign cost, umbrella insurance premium, books and seminars, office supplies, etc. I'm trying to do my own taxes with Turbotax and I can't figure out where to deduct these. I don't think I'm supposed to just move these expenses into a specific rental property's expense?
2. Are the above expenses deducted against rental income or regular income? I currently have properties with rental income, but the above expenses are still higher then the income.
3. I'm considering moving my properties into an LLC to take advantage of the pass through deduction, but I don't understand how the phase-out works. My AGI is greater than $200k, does that mean that I don't get any pass-through deduction at all?

Again, thanks a lot for your help.

Ray