All Forum Posts by: Tushar P.

No need to regret as it may be a good pass. Many syndicators claim skin in the game but ignore follow up questions as the fees they collect may be greater than their contribution. They would have nothing to lose when the deal goes south. I think their business model relies on showcasing successful exits during good times (everyone is a genius in a bull market) to ensure that there is no shortage of sucker LPs. 

@Prell Santi make sure you do a thorough search on the forums to read the experiences of other investors. There are business models that rely on selling overpriced properties to Californians that no local will buy. You may also need to filter the advise based on whether you are getting it from someone trying to sell you something.

@Elizabeth M Williams I hope that in your future advertisements you can put a disclaimer upfront that there is no guarantee. Otherwise anyone who dumped money in the stock market a year ago can start guaranteeing 300-500% annualized return with zero effort.

By the way, anyone who dumped money in a diversified stock index (like s&p500) 10 years ago has had 15% annualized return with zero effort, but even that can’t be guaranteed. Anyone who dumped money in Facebook stock 8 years ago has had 10x return (33% annualized) with zero effort, but that can’t be guaranteed either. Get the point?

With syndications, it is important to point out who will be left holding the bag when the deal goes south.

You need to talk to professionals, like institutional family offices. You will not find them here, though may get some insight about it.

@Arn Cenedella I ageee that the tax benefits for the passive investor is blown up. Seems like one has to shell out several thousand dollars just to manage paperwork, and accelerated depreciation makes it worse. I guess no one wants to highlight this 😏
https://www.biggerpockets.com/...

This is a common question, and the answer is yes. Otherwise what’s the point of losses being suspended if they can’t be used to offset the profits upon sale/exit.

In your original example, assuming $50k of depreciation taken over 5 year hold period and $20k of suspended losses at exit, your adjusted basis will be $50k and hence the total gains will be $150k ($200k - $50k). The net gain will be $130k ($150k - $20k). This will be broken down as $30k ($50k - 20k) taxed at depreciation recapture rate (25%) and $100k at long term capital gains tax rate (15% or 20%).

This is my understanding but I’m not a cpa.

@Daniel Han just remember that long term capital gains can be from non real estate assets too. I think that’s where you are getting confused.

Also, not sure how sustainable/reliable this strategy is - relying on accelerated depreciation in the next deal to offset the gains from the exiting deal. I think you may end up paying more in taxes (depreciation recapture is taxed at higher rate than long term capital gains) if only once the strategy is not continued, unless you have no/little income to begin with.

You may end up like 1031x investors who overpay to ‘defer’ taxes.

Well, I am a real estate investor myself haha

It’s for every investor to decide what they want to be. Unfortunately people who grow up poor don’t have much choice, and old habits don’t go away even after they are well off (and even if they have the intellect to realize what they are doing) 🤗

I was just pointing out what a lawyer can do based on the facts that the op himself provided.

Besides that, I understand very well when you say that no real estate training/coaching teaches to be honest and hustling (euphemism for swindling) to make profit is the “name of the game” (while believing to be a problem solver). Reminds me of how the drug dealers south of the border think. They have no compunctions about what they do - they consider themselves as “professionals” managing a “business”, and truly believe they are helping the society by lifting certain people out of poverty.