All Forum Posts by: Marshall Hooper

It's fairly simple. The buyer gets to deduct interest just as if it was a bank mortgage. If he is an investor, he also gets to depreciate the full cost of the property, as if it was purchased for cash.

The seller receives interest and principal. Interest is always taxable when received. From principal part, a fixed percentage is considered a tax-free return of the investment, and the rest is taxable capital gain.

The tax effect for the seller is that he spreads his capital gain tax over the length of the loan. Not evenly though: it is a fixed % of the principal portion. So, a large down payment also creates a corresponding capital gain in the first year.

Another way to say it: the seller pays capital gain taxes as he receives payments, as opposed to everything at once.

Has this changed now with IRS publication 537 that states you can't use the installment method if you're a "Dealer"? And they define a dealer as someone who regularly sells personal property.

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Hi Yuvaraj!

I can offer some suggestions. I'll PM you.

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Originally posted by @Michael Carpenter:

@Marshall Hooper Yes, I commute from Waco to Belton/Temple area.. So I’m looking for properties in both of those areas. I’m just getting started, so I’m still figuring out what type of properties are going to be best for me. Right now multi-family properties seem to make the most sense.

My partner in Waco has a BBQ restaurant where the local REIA is held. The next meeting with be November 7th at Uncle Dan's BBQ on Lake Air

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Originally posted by @Michael Carpenter:

Hey BP family! I’m looking to connect with local wholesalers in the Central, Texas area. I’m new to real estate and have alot of questions, and want to talk to people who are actually doIng It In my area!

Hey Michael,

I invest in Waco and do not think either one of those suggestions could help you out there. I think New Western has an office in Austin though.

Are you living in CTX? What kind of properties are you looking for?

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Are you picking the homes up from wholesalers or doing your own marketing?

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Hey Mark,

I only posted it to let you speak your peace about it. I actually thought about meeting up at your REIA, but I like to do research first so I googled your name and this was the first thing that popped up.

Still curious though why you're no longer allowed at the RICH meetings? And no, I am not a member nor have I ever been to one of their meetings.

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Houston, Texas

Feels like the "posts that have been removed" to posts ratio is getting much higher here on BP. Lots of censorship.

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Originally posted by @Jim D.:

That sounds like a stressful portfolio to hold, if you were to have a bunch of those. The numbers are obviously not pretty in the scenario you described.

I just did my first ARM (7 year fixed, 30 year amortization, 4.5% with a cap at 9.5%), and could hardly stomach that when I looked at the worst case scenario--it would go to negative cash flow by $200-300/month, and those rates are not too far-fetched. (It also has an option to re-amortize for a lower payment if I pay down extra principle, which is a nice option.)

I can absorb the worst case scenario for one ARM since everything else I hold is on low fixed rates and cash flows well, but I'd be wary of collecting a bunch of ARMs like this if they all have the potential to go negative cash flow. You don't want to end up telling your story on "The Big Short 2: ARMpocolypse".

That last sentence is exactly what I'm talking about. It's almost like the guys selling these ARMs are the new Country Wide. But the key to if this is going to have negative consequences is how many investors are actually using them. It might be so small that it won't matter. Or it could end up bankrupting some lenders.

@RIck

Rates went from 9% to 17% in 4 years from '78-'82. Regardless if it's a low probability event, it's something that should be prepared for. Especially when you're investing in a long-term and illiguid asset.

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Originally posted by @Mark Pantak:

It is not like it used to be … back when I was on the board of directors at the Rich club, back when it was a non-profit for the members benefit and I used to bring LOTS of people there and pay for my membership by bringing new members. I have been told (some time ago) that I am no longer welcome there, me and everyone with experience who have worked to help protect people … now I warn people about most of these groups … just start with the structure … it was taken over as a “for profit” group … all you have to do is look to see who is making most of the profit … it is no longer for the benefit of the members …

There are plenty of other groups to check out, many are free or very inexpensive …

What I can tell you about most of these groups in 2018 is “watch out” and be careful … the gurus will tell you anything to get your money and you don’t have to pay $10,000 or more to get help …

Is this why you're no longer allowed?

https://www.ripoffreport.com/reports/mark-pantak/houston-texas-/mark-pantak-mark-pantak-capital-resources-group-mentor-mark-pantak-liar-cheat-snake-ho-765179

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Houston, Texas

Put up some WE BUY HOUSES signs or billboard on it.

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All Forum Posts by: Marshall Hooper

Marshall Hooper has started 18 posts and replied 121 times.

Post: Tax implications for owner financing

Post: Referrals in Waco for C class multi family

Post: Getting connected to local wholesalers

Post: Getting connected to local wholesalers

Post: HURRICANE HARVEY BRRRR SCENARIO

Post: Houston Real Estate market? what should be reasonable fee

Post: Out of State investors getting ripped off, heed these warnings!

Post: Stress Testing ARMs in case of Interest Rate Black Swan event

Post: Houston Real Estate market? what should be reasonable fee

Post: Help me outwit a scam...or at least stop the loss!