All Forum Posts by: Vanessa Li

1. Insurance Proceeds and Taxability: The insurance payout you receive is not "free money." For tax purposes, it's considered a reimbursement for property damage. Any amount over your adjusted basis in the property (initial cost minus depreciation) could be subject to capital gains tax unless you reinvest it strategically.

2. 1033 Exchange (Involuntary Conversion): A 1033 exchange (involuntary conversion) is specifically designed for situations like fire, natural disasters, or eminent domain. Unlike a 1031 exchange, it gives you more flexibility in timelines and reinvestment options:

- You typically have two years (sometimes up to three) from the end of the tax year in which you receive the insurance payout to reinvest in a similar or related property.

- There’s no requirement to go through a qualified intermediary, as with a 1031 exchange.

3. 1031 Exchange: A 1031 exchange is also an option but is generally less favorable than a 1033 in involuntary situations. With a 1031, you would have to meet stricter timelines (identify a new property within 45 days and close within 180 days) and use a qualified intermediary.

Recommendation: The 1033 exchange is likely the best route if you’re looking to reinvest and defer capital gains, as it provides more flexibility.

This post does not create a CPA-Client relationship. The information contained in this post is not to be relied upon. Readers should seek professional advice.

I have a rental property and burnt down by the tenant too. I have received the payout by insurance. If I sell the house, can I do the 1033 exchange too? Do I have to submit any application to IRS? What should I do when I file my tax this year?

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Quote from @David D.:

I would consider taking over a turnkey property there but wouldn't advise investing in a conversion unless you're going super luxury or simply want to enjoy the area yourself frequently.

There are already 3k properties in the market currently and the average occupancy has dropped almost 23% in the last 12 months. IMO there are just better markets that require a much lower investment for a higher CoC return.

Hope this helps!

Thank you David. In your opinion, what are the better markets with lower investments and higher return?

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Los Angeles County, California

Hi everyone,

I’m exploring the idea of purchasing a property in Big Bear Lake, CA to use as a short-term rental (Airbnb), and I’d love to hear from anyone with experience in the area. I had some experience on long-term rental out of California, but I know running short-term is a different story. I’ve done some research on the local regulations and the market, but would appreciate more insights before moving forward.

- Is Big Bear Lake still a profitable Airbnb market in 2024?

- How difficult is it to comply with the city’s regulations?

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Los Angeles County, California

Hello, I recently found a house with a fair price but it comes with rotting on boards on top deck and water pool (improper drainage) in front on the sidewalk. I see black things on the deck and in the laundry room. I am guessing this SF may have gutter issue. I have zero knowledge on this. Please help and tell me how big this issue could be. Is this a potential structure issue?

This SF is located in Dallas, TX if this information is helpful.

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@Murali Jesudoss Congrats! May I ask the zip of your property? I am interested in investing in Ocala and just start to learn about this city.

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Recently purchased a rental property with a pool which gives me a big headache. So I would like to remove this pool and grass the pool area. Below shows the picture of my yard and the above ground pool. My property is located at Dallas area. Is there anyone can help estimate the costs of the pool removal and grass rebuilt process?

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I am looking for the relatively big city with job, population growth to invest my first rental property. I wish it provides me positive cash flow in each month. Is Houston still a good place to look at? If so, what area/neighborhood around Houston?

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@Alex Cueto appreciated. This information is very helpful. I start to look at the opportunities in Riverview and Lithia.

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@Jorge Vazquez Thanks. It's very helpful. I will check out these neighborhoods.

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Hi! I am from Los Angeles and looking for rental property investment opportunity in Tampa FL. I am looking for SFH in price range $200,000 to $300,000. I would hope it has high occupancy rate and get around 5% cap rate. Is there any areas/neighborhoods recommendations? I would appreciate your help.

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All Forum Posts by: Vanessa Li

Vanessa Li has started 5 posts and replied 11 times.

Post: Investment property burned down.....

Post: Considering Buying a Short-Term Rental (Airbnb) in Big Bear Lake—Thoughts?

Post: Considering Buying a Short-Term Rental (Airbnb) in Big Bear Lake—Thoughts?

Post: Will You Buy A House With Wood Rot

Post: 3rd Deal in 2021 in the Craziest Ocala Market..

Post: Above Ground Pool Removel

Post: Still Good Idea Investing Rental Property In Houston

Post: What Neighborhood In Tampa To Invest?

Post: Is Tampa Florida a good market?

Post: What Neighborhood In Tampa To Invest?