All Forum Posts by: Ryan Detig

@Amber Landry  I am not sure what "high income" is but I personally would probably listen to the advice of the professional.  If you don't trust them, then set up a meeting with 2 other CPAs, pay them for an hour of their time, and see what they think.  I hear a lot of people that are concerned ( AKA complain) about a high tax bill and my response is usually "talk to a professional (or two) to maximize your tax savings as much as is allowed by law.  After you do that don't worry about it because if you still pay a lot in taxes it means you are making a lot of money so be grateful".  I usually get dirty looks after that :).  I think it is all perspective.  @Amanda Han has a great company out of Anaheim CA that specializes in tax planning/strategy for real estate investors.  It will run you around 4K for a full analysis and recommendation but if "high income" is really high income that 4k could be well worth it.  Her company can be found a Keystonecpa.com  

@Kay Ferdous  Note I am not a CPA.  What I do understand is that he will have to pay capital gains tax on any profits over 250k if married and 500k if single.  Calculating profits is the tricky part.  Profits are calculated as the sales price minus the basis.  The basis is the purchase price plus any repairs he has made to the property over the last 30 years.  Hopefully he documented that well because that could make a big difference in the bases and ultimately in how much taxes he has to pay.  If he is married I would assume it would be very close to him not having to pay any capital gains taxes as the basis of the property has to be close to 200k.  Don't forget you get to take all closing costs and costs associated with selling the house out of the sales price.  Ultimately though talk to a tax professional as I am not.

@Jason K. Sounds like this could be a sensitive situation. Remember empathy when dealing with this. I would probably reach out to the care giver and ask them some questions and see if they know more about the situation and if they can put you in contact to the POA if there is one. If there is not one then I am not sure but I would start there.

@Amir S.  You have a VERY VERY VERY Complicated situation here.  I would definitely talk to a CPA.  

@Ozzy Smith  We all have different tools in our tool belt and after use (or abuse) we have to spend the time and money to sharpen them so they can be useful to us in the future.  Sounds like it is time to sharpen that credit score tool in your tool belt.  Another option if you have the time is to get a job.  Even if it is just for 6 months to be able to refi.  Finally you could try to make contacts in your local reia that do lending and start to build that relationship in hopes that they can put less weight on the low credit and no job because they know you personally and know what you do and how you run your business.  

@Casey Caspers Welcome to the group.  There is a TON of info here on BP.  My recommendation is to spend 1 month researching the major ways to invest in real estate.  Pick which one you want to pursue and then spend 6 months - 8 months researching that way to invest.  After you have chosen your investment strategy, and while you are researching 6-8 months on how to do it, also research your market.  Finally, find a local Real Estate Investment Association and start going to their meetings and asking questions.   Finally, notice how I did not mention spending any of that money yet?  New investors with high amounts of cash is a very bad combination that can quickly lead to failure.  Please make sure you do your research first before taking action. 

@Brad E.   I would argue that there is no other economic force in play other than supply and demand which drives rental prices but that is a topic for a different thread.  It will all boil down to supply and demand whether that is supply and demand in housing or supply and demand in the work force.   In my area I find that the high demand for high paying short term (1-4 year) transient jobs from multiple large companies in different industries holds the rental mark in the range of 1.3% - 2.2%.  That is the rent runs 1.3-2.2% of the purchase price.  

@Ozzy Smith If I knew a trusted contractor I would get a HELOC for 80% of the paid off properties (60k), use that to rehab the two vacant ones, rent those 2 out, and then see about getting a portfolio lender to refi all 5 properties as a bundle at 70% LTV (115k). Then you have that money you can use on your other better performing opportunities, assuming those other opportunities are not time sensitive.

@Joel S.  You cannot terminate the lease early without the tenants agreeing too it.  The worst that can happen is a very long, drawn out, expensive legal issue you don't want to deal with.  Most likely what will happen is that you will turn good paying tenants into pissed off nonpaying tenants (that are stilling living there) and then have to pay for lawyer fees (theirs and yours).   I think the best thing to do is call the tenant and have an honest conversation with them.  Tell them that the lease will not be renewing at the end of the term and that for whatever reason you will be selling the property.  Tell them that they should start looking for a new place to stay and then throw in there than if they find a place soon, you will pay them xxxx number of dollars to break the lease early and leave the place clean.  If they know that 3 months from now they have to move but if they move in a month they get an extra $1000 (or whatever you decide based on your situation) I don't see why they would not want the extra cash.  Plus that way you do the responsible thing and give them as much heads up as possible so they have time to plan.  

@Brett Goldsmith  Thanks for the help.  I have a realtor that I have used that has said she will help if needed.  The price point is low but she will get the flip listing as well so that helps.  I guess I am just naive to think I can handle this like an off market deal working with the executor.  The estate has the option to let the bank foreclose and take the property back correct?  My thought is that if we (executor, lawyer, myself) can show the bank that taking my cash offer instead of spending money foreclosing on the property will save them money but I realize I am probably over simplifying the process.  It is currently a 15 year conventional loan through Ditech with 14 years remaining on original loan.