All Forum Posts by: Account Closed

@Mike Dymski thanks for hopping on. In Tax Free Wealth by Tom Wheelright, he talks about doing cost segregation for all of the pre-existing stuff like cabinets, appliances, floor coverings, parking lots, fences, landscaping, etc. No rehab required. Is that totally wrong?

@Adam M. it's just an Amazon business. We buy lots of products from China and sell on Amazon. It seems like Amazon is the new Cal gold rush, and there's still lots of opportunity. :) 

@Joel Owens we live in the US, we entered a zip code from Texas and not sure why it says philippines. For commercial retail, we are interested in it, but we read an article that said you're basically paying double per square foot than regular market value, and it's more an investment in the company and good faith that they will continue to stay in business in that location. We are still definitely interested and will continue to learn more about it. Thanks so much for the reply! 

@Joseph Bramante thanks for the reality check on the amount of capital needed for a purchase of that size. We listened to a few of Robert Kiyosaki's books and he made it sound like we could do no money down be being a little creative, and we could also do non recourse loans and we assumed that meant the bank wouldn't require huge capital reserves. Ignorance on our part. How big do you have to go before lenders will give you non recourse loans? Is it just a matter of having a good track record, and it doesn't matter how big the loan is? We didn't know about the prorating for depreciation, that helps a lot. Thanks for the recommendation for finding a syndicator. Will definitely look into that. 

@Chase Gochnauer thanks for the realistic numbers, that really helps. I guess we were optimistic and somewhat mislead by the book Tax Free Wealth.

@Joseph Bramante, thanks, that helps a lot. And thanks for the tip to start with a 150 unit. That makes a lot more sense for the deductions we need this year. If we purchased it by the end of 2017, would we get to take depreciation for it starting in 2017? Is purchasing a 150 unit by the end of 2017 unrealistic, with it being our first deal? We have been reading books and doing research, but no boots on the ground yet, so we have no idea on the time frame.

We will only have enough for a 5% down payment for a 150 unit by the end of the year. Do you have any tips for who to contact for lending, or creative funding? We have zero bad debt and 800 on credit scores, but maybe that doesn't matter for these kind of purchases?

Thanks for the reply @Jaysen Medhurst!

According to the IRS rules, if you spend at least 750 hours on your real estate business, and more time than any other job or business, you are considered a "real estate professional" and can deduct the losses as active losses against active income. See this article:

https://www.forbes.com/sites/janetnovack/2013/03/26/how-real-estate-investors-can-protect-themselves-from-the-irs/

Have you read Tax Free Wealth by Tom Wheelright? He talks about how you can take almost DOUBLE the depreciation on each rental if you do something called cost segregation. Did you factor that in when you said it's probably not common to see a loss on a 50-unit? Thanks so much. Have a great weekend!

Hi,

My wife and I run an online retail business with extremely high "earned income". We want to start investing in real estate to offset that income by one of us becoming a "real estate professional". We don't spend more than 750 hours on the retail business, so we meet the requirements. We're thinking of starting with a 50 unit apartment building and moving up from there. Our question is, how common is it to show a loss after depreciation, and how much real estate would we need to purchase to offset, say, 800k of earned income? Thank you so much for your input. We are new here and excited to get to know everyone.