All Forum Posts by: Jacob St. Martin

Honestly, long term investor loans and DSCR loan rates aren't really any better than that right now. Most hard money you get these days is 12% interest. I wouldn't really worry about it as long as there isn't a balloon. But it you really want new financing you should look into either a standard fannie/freddie investor loan or a DSCR loan depending on your situation

Hello Seth, 

It sounds like you are in a good position here. This is scenario that I think could go either way. From the way that you worded your post, it sounds like you are not looking to spend a lot of time on your real estate projects. If you are then I'd say definitely sell, otherwise the rest of this post is more applicable. 

I live and invest in Charlottesville and I can tell you that the market has basically ground to a halt. Prices aren't coming down, but there are also hardly any buyers, and inventory is very low. If you sold you may have to drop your price more than you might want to. However, getting returns that match the S&P in real estate is not exciting at all. Additionally, townhomes appreciate much slower than detached single family homes tend to.

My personal advice would be to sell this property and then 1031 either into a better property near you that is low maintenance, or (probably better for you) invest the capital into a syndication or partnering with an active investor where you should get returns better than the stock market. 

If you want to discuss that option more in depth feel free to reach out. I know some great syndicators and I personally partner with investors on deals and typically get them returns in the 15-25% range depending on the type of deal. 

Albemarle county tends to have pretty strict regulations when it comes to zoning and building. If you are an owner occupant my recommendation would be to build an adu and rent it on Airbnb but you can only Airbnb in Albemarle if you are an owner occupant so otherwise I would do something else

Hello Kristine, 

If you heard the son talking about living there then I would say that to them. If they insist that he won't be living there I wouldn't rent to them. If they are going to lie about something like this that has no financial consequence for them they are going to lie about other things. 

Feel free to reach out if you have any other questions!

Hello Avani, 

I imagine that there is demand here. I think the tough part about targeting the film industry directly is that in order to consistently pull them you will probably need to get in touch with someone in that industry and pitch it to them. I imagine this will be a difficult connection to make. The bright side is that is Atlanta is a large enough city that there is certainly demand for MTRs. You could start with targeting travel nurses and other traveling professionals while you try to work your way into the film crowd. 

Hello Jerome, 

If you buy a BP pro membership you get free access to rentredi, a property management software that does have the features you seem to be looking for. It isn't perfect but it is pretty good and it alone makes the BP pro membership worth it. 

I would probably go the mini split route if there are easy places to install them. If not then you could just put in a smart thermostat and lock it but you are inevitably going to have people unhappy with the temperature. 

When you are using OPM I think you should always have a specific deal before you open an account or transfer any money. I think it is great to network and gauge interest for when a deal comes but bring them something before you take money because if you take the money first it is idle and they are getting no returns while it is sitting there unless you can pay some return out of pocket which I am sure you aren't doing because you are using OPM. 

Hello Earnest, 

This is a great problem to have. Based on your goals, experience level, and my assumption that high earning w-2s tend to be demanding of your time, I actually think that there are better ways for you to offset your w-2 income. If you were to partner with another more experienced investor to purchase a short term rental, do a cost segregation, and "materially participate" then you could gain the benefits you are looking for without negatively cash flowing, and you could work out a deal where you maybe only have to materially participate for the first year to claim your tax benefits and then you can act as a more passive investor. I actually partner with investors on deals just like this so if you are interested feel free to reach out!

Hello Jerry, 

I want to preface by saying that I am not a CPA and that you should definitely have a CPA with experience in RE because they would be able to answer these questions. If you have one and they can't answer these questions you need to fire them and find one who can. 

Now that that is out of the way, hopefully I can help with at least some of your questions:

You can only offset the gains from one property with the losses from another if you are utilizing one of two tax strategies. One is having the tax status of qualified real estate professional, which basically means that your primary job is on real estate. The other way is using the short term rental loophole but you have to be the person spending the most time in managing the asset which may not be worth it for you. 

If you are able to get the qualified real estate professional status then your plan would work. In an ideal world you want to buy a high price tag property that makes you a small amount of profit but is an on paper loss from the huge depreciation on it. 

I am not sure about SALT limitations, sorry!

When it comes to your LLC I believe that you should be able to capture the depreciation from those properties against your other ones assuming you are a qualified real estate professional as long as you are a single owner of the LLC. I think it is then considered a pass through entity, but is not if you have partners. I am not 100% sure on this though so I would definitely advise talking to a professional.

Lastly, based on your portfolio and your questions, it sounds like you are a high learner but haven't been making that great of returns in your portfolio. Have you considered investing or syndications or as a cash partner with an active investor. These options could get you much higher returns with none of the headache. Let me know if you want to chat more in depth about anything here, I hope this helped!