All Forum Posts by: Shyd Coloma

Hey @Tony Clark. I'll be out of town this day but would like to make it out for future meetups. Do you have an email distro list for your meetup? I'm bad at checking my BP account regularly.

Quote from @Evan R Wright:

I am located in Ventura County and am currently pending joining the Subto mentorship program. Would love to talk to some members before I get started or hear any other feedback anyone has to offer! 

 Did you end up joining the program? I'm in Ventura County as well and wondered if anyone is doing Subto deals in the county. 

Quote from @Luca Shaw:

Hi all,

Last year I bought a 2/2 SFH in a suburb of LA (ventura county) fully intending to use it as a primary home. 30 year fixed @ 5.375%. Recent developments in my career lead me to have to move about 2 hours away. That leaves me with deciding what I'm supposed to do with this property. Its a 50s property but I've updated a ton of things about it. Roof probably has a few years left on it, only real weakness is eventually I'll have some major mainline work needed.

My options appear to be the following:

1. Rent it out. I can get $3000-3500 rent pretty confidently after looking at comps and discussing with various property managers. This would leave me basically cashflow neutral/slightly positive on my P&I but negative after taxes, insurance, and expected maintenance (assuming 1.5% of home value in maintenance per year). After all of that, I'll be ~$1k negative per month but likely hoping for some solid appreciation as a source of return. I can afford negative -1k monthly with this new job but obviously I don't love it.

2. Sell it. I can probably sell it and after fees probably lose 20k or so (as far as down pmt + closing costs + improvements).

Renting (even though negative) seems like a good way to go because I have a good risk tolerance, however I am worried about California landlord laws + unexpected maintenance/capex. Looking for BP community suggestions as this is weighing on me. 

Hey Luca! I live in Ventura County and currently self-managing my 2 properties. The demand for rentals are very high with the limited housing so if you could swing it, I would look into the options that people have been putting out there for renting outside of the traditional long term rental. I'm actually on the hunt for my next rental property and thinking about doing the rent-by-the room approach to working professionals. Have you thought about that? Happy to discuss what I've learned about that method and see if it can work for your situation.

Quote from @Sarah Schopbach:

Hello Bigger Pockets Crew,

My husband and I live in Asheville, NC.  But we are looking to do our first investment somewhere NOT as expensive as our current town.

Does anyone have experience in doing well in the MTR market focusing on hospitals to recruit nurses?

Hey Sarah! My wife and I currently own an MTR property in Columbus, OH and have owned/operated it for almost a year now. We initially thought travel nurses would be our biggest drivers since we are within a 10 miles radius to all the Top major hospitals in the area. But what we came to find is that we attracted so many different types of travels (digital nomads, people relocating to and or from the city, summer interns, etc.). We did get a set of radiology techs that shared our space as well. We live in California so we definitely get living in an expensive town. Let me know if you have any other specific questions. Happy to help!

Hey Dylan! I'll send you a DM with the contractor I recently used to help me out on my property in Oxnard.

Quote from @Russ Eisenberg:

I am likely going to be in this situation next year.  @Shyd Coloma - It would be great if you would be willing to share what you learn.

Also, do you have any conflict between the sides?  I am a little concerned about the mixed model, but for our needs it would be ideal. 

Thanks,

Russ

@Russ Eisenberg - There have been a couple challenges like one guest throwing a party after hours especially after its clear in Airbnb guidelines and my house rules about no parties and quiet hours. But over 95% of the stays there were no problems, and I'm blessed that my LTR tenant has great pride of ownership in our property so he looks out for the property and has even offered to help maintain parts of the outside of the duplex to ensure my STR guests always have a great overall impression of the property upon arrival. If you have any detailed questions, feel free to message me!

Quote from @Michael Plaks:

@Shyd Coloma

Trying to get a second opinion against a CPA from an online forum is not a reliable route. It's like trying to second-guess your doctor online. Even though I'm a tax professional with over 25 years of experience, I don't know your entire tax situation, and there could be important pieces you did not share. Also, I'm only responding to you quoting your CPA, as opposed to his actual statements.

That said - I agree that reporting the two sides differently could be a red flag. However, it is how you are supposed to report it for accuracy, before we even consider the potential benefit to you. And then, it is possibly beneficial to you, on top of that. I'm saying possibly, because there could be some missing pieces in your story.

Forgoing legitimate tax benefits in order to avoid red flags is not something I would recommend to my clients. As long as you have your facts straight to defend this position, I would not worry too much about IRS challenges. When you're in business, especially in real estate, being open to IRS challenges comes with the territory.

I appreciate the response! My CPA was up front with me and told me that they've never had a client with this specific situation before. Their office is open to filing the property as 2 separate pieces since it does make sense for taxes and I have all the documentation to backup material participation and the split costs for the year. They did say it is aggressive and to know that it could increase chances of audit if we decide to go that route since this is a gray area in the tax code. They actually recommended that I ask around my REI network and see if I know of others who have done this before and they'd love to talk to them and their CPAs, so I decided to post in the forums to get insights. Unfortunately, everyone in my network has SFRs that are 100% STRs or LTRs and no hybrids like my situation.

Looking for anyone who has a duplex that is mix of STR & LTR and claim material participation for the STR side for the "STR loophole" to offset active W2 income? I recently had an email exchange with my CPA regarding my investment property that is a duplex where one side is operated as a LTR and the other side is a STR. 2022 is my first year with this investment property.

The average length of stay for the STR side for the year came out to 5.5 days so it does meet the STR criteria. We meet the material participation criteria as well since we self-manage the unit and set it all up in person ourselves. We have tracked and logged more than 500 hours and materially participated more hours on the property than the rest of our team (cleaner, handymen, etc.) and would like to try and exercise the "STR Loophole" to offset W2 income for 2022. My CPA is telling me that because this is a duplex, it might be "aggressive" to file half of the property as a STR and the other half as a LTR and I could be targeted for an audit since this is a gray area of the tax code. They haven't had clients with this type of situation arise yet. All their client's properties are clear LTR or STRs and not a mix. Recommendation from my CPA is that we file the whole duplex as a LTR, but then we obviously couldn't offset my W2 income if we went that route. We aren't able to claim REPS at this time. Looking to see if others have encountered this situation before.

I am reaching out to 2 other CPAs for a consultation as well, but looking for some anecdotal data from others to see if they have run into this issue in the past.

Quote from @Harrison Chow:

Hey Shyd! Hit me up!

Yes, sir! Sending you a message now.

I'm looking for some support on working with a landowner who's currently building a duplex in the lot right next to my current rental investment property in Columbus, Ohio. My current duplex right next door is running as a mixed STR/MTR and it's doing great!

I found the contact information of the owner of the property and they've agreed to talk to me about selling me their home once it's completed (planned completion is Feb/March 2023). I currently don't have enough funds for a down payment and furnishing the duplex, but I REALLY want to figure out how I can get the owner to sell me the property. I'm thinking I need to throw out some creative financing ideas or maybe find someone that would like to partner on the deal. I already have a cleaning and handyman team helping me with the property right next door and I'm super familiar with the neighborhood. I think this would be a great property (if the price is right) and I already know the area has great potential to implement the MTR strategy!

I'm looking to chat with someone about options I can throw out to the seller and how to have the conversation with the owner in general. All my deals have been standard deals with conventional investment property loans so this would be a first for me. It would be great if I could jump on the property before the owner thinks about putting it up on the MLS. I'm looking to connect with anyone that can help provide guidance on the best way to approach this seller and what I can say to entice them to sell to me.