All Forum Posts by: Andrey Y.

 Very well said. Lately, I have my core sponsors but have expanded more and more into so called "recession resistant" asset classes within the real estate niche. Also, not afraid to not go back to a sponsor after they have not delivered or had some other issue with the first deal I partnered with them on.

My strategy going forward is to continue to fund 4-6 deals a year. Will completely be done with a W-2 job by 2023 but will consider practicing for 1-3 months per year to maintain skills and CME. This will enable me to double NW every 7-8 years which is very attainable and realistic.

The next logical plan going forward would be funding overfunded whole life policies and expand to lifestyle/investment properties overseas which serve many functions at once.

 I've been in 20+ passive opportunities to date. 5-6 exits. 0 money lost. Zero negative return. Zero total loss. No capital calls.

Maybe it was just luck. Or maybe I'm pretty decent at vetting sponsors and passing on deals. I'll admit I did a funded a few deals in the early days that I wouldn't jump on today.

I fully expend to have 1 or 2 lose money once I'm at the 50-75 passive opportunities invested.

How about you? What has been your experience?

Now that we are more than 1 year after this point.  Let's talk about the 'upcoming economy transition'.

Right now, investing in private placement syndications makes even more sense than ever. 1/3 of the dollars every created were willed into existence over the last 1.5 years, and with the cervesa sickness policies enacted, this is driving the dream of homeownership more and more unaffordable.

We are going to see record rental demand going forward with huge housing unit shortages in many markets.

Both passive investment in syndications and buying SFHs can fit this role, but owning rentals suffers from all the issues I outlined in my first posts.

I'm usually funding 4-6 deals a year, and even with this cash position in portfolio is getting uncomfortably high. A good problem to have! (maybe)

 Why is this relevant? If my top tax bracket is say 24%, then I am paying 24c on the last dollars of my W-2. However, disposal of a real estate asset should result in long term capital gains tax of 15%. So why is my day job income being lumped in with my passive and active real estate capital gain? That is what doesn't make sense.

Bump

My question is, selling real estate assets that you've held for more than 1 year should result in a long term capital gains tax rate of 15%.

The math isn't adding up. Even if I had ZERO passive lose carryforwards, the tax bill cannot be $40K on a $100K gain on a property and a single syndication exit. And I definitely have had passive carryforwards.

Thoughts on this guys? I have also been looking for a new CPA for 2020 (extension was filed), so would love your thoughts and I think if a professional looks at this tax return draft they may find it's not correct.

I just got a draft from a CPA, that I need to write a check of $40K for taxes.

I have in my email where he said even if I don't do a 1031 exchange, my capital gains will be offset by passive carryforwards. I've had issues with this particular CPA taking 3-4 weeks to respond to emails and generally giving off the cuff, not researched, and flat out wrong tax planning advice.

Anyway, I had a partially failed exchange (Realty Doctors promised they have NEVER missed a clients exchange, and lo and behold their builder couldn't build the 2nd property in time).

My only gains are a $102K undeferred gain on the property I sold, and a single K-1 syndication exit where I invested $50K and got a $30K profit.

When I look at the draft return, my capital gains from the sale of my home are being added to my AGI and I'm having to pay ordinary income taxes on sale of a long term capital gains asset. That seems very off to me.

I've been managing my rentals remotely but honestly could have paid more attention to them. As mortgage rates were falling, I decided to do another refi in 2021. Main motivation was to get out of the crooks that are Wells Fargo. This actually took almost 8 months (the first lender couldn't deliver), then the 2nd lender did the refi in under 14 days from start to finish (go figure). 

Now, my interest rate is 2.375% and my PITI monthly is just over $1000. HOA fees are $750. CapEx have been 0% (HOA fees cover this), and repairs have been minimal (<1%o of gross rents), due to this being a remodeled condo.

Today, my today gross rents are $3150 - for a 'cash flow' of about $1450. I have $0 in this property, so its an infinite return in a sense. This is more of a fun property and I only consider my syndications income as what I can live off of.

The moral of the story. Always be positive and energetic, and don't take this stuff too seriously.

Don't "wait until the market crashes next year, then buy in". It won't. That mentality will make you poor while others who took BOLD action will pass you buy. Happy to discuss real estate any time.

Its important to mention that the HOA fees were initially $375, which was incredibly low for the area. This eventually ballooned to $750, the amount that it is today. About normal for the area. Around 2016, I started renting out both units separately - the 1BR for $1700 - 1950, and the studio for $800 - 1200. This depended on market conditions and whether or not there were pets.

Keep in mind I was always at least 4-6000 miles away. Living all around to include Asia. In 2017 I basically started investing heavily into passive syndications. I didn't buy any additional rentals - except for 1 sold 1 older unit on Hawaii and exchanged it for a new construction rental on FL. Besides that, it was all diversifying into K-1 passive investments.

As a semi-busy professional, most of us eventually get tired of being a landlord. Even if you told me I can make a 50% IRR on my rentals, I would still take my 15-20% IRR as a passive investor. All day long.

In 2011 I bought my first ever property, in Honolulu. I used a VA loan and put about 12-15% down (didn't have to). Initially, I lived in the 1BR and then I realized that the separate entrance small bedroom and bath wasn't really used. I began to rent this space as my first ever foray into being a landlord. A nice $750 per month.

I believe my first loan was in the high 3s %. Fast forward five years or so, I performed a couple cash out refi's which pulled $60K in cash out of the property. It was at this time that I also moved out of the 1BR.