All Forum Posts by: Account Closed

@Account Closed

If I was of humble means, yes I would. But I am not so no. And that's the truth. That said, I would not think less of one who does or has to. Not saying that you do. But there are others who are born with different advantages and disadvantages in life, and you just gotta work what you got regardless where you live.

Also, moving in for a short time to get a better rate on a loan instead of paying 16% to 3 credit cards IMHO is a good idea.

It doesn't seem as bad as it sounds. On debt of 28k at 16%, that's $373/month (but not all his debt is at 16%). OP is getting $775/month and assuming expenses at 50%, he's almost cash flow neutral to positive since these are conservative rough numbers.

Here's another idea that I haven't seen others post yet. Why don't you move in to the house yourself, then try to get a loan as owner occupied? Rates would be lower if you are successful on this front.

Personally, if I was of humble means and the credit cards company gave me 28K where I'm making 775/month on that money, I would not give up the house. . . I would give up my credit! 

Let's not forget this house is paid off!

Just saw that your credit rating took a hit so nevermind, what I said probably won't work. You can try instead as an improvisation to that strategy to pair up with someone like a significant other or family member to do balance transfers to pay off your loans. When it comes time for your partner to pay off their 0% credit cards, you do the same 0% transfer on your 3 credit cards to pay off theirs if it's available to you. Your partner will take some risk so make sure know to keep it honest. There's the risk that that option may not be available when it's your turn to return the favor.

Otherwise, looks like your best shot is to sell or do a rent to own type of transaction. Note that all your interest paid on the credit card is tax deductible so there might be an upside.

If your credit score is not too bad, try applying for another new credit card (CC4) and do a 0% balance transfer. You'll still pay 3% of the principal each time doing it, but you can wipe out the first 3 credit card's debt. When the new (CC4) balance is due, use the first 3 credit cards you use to pay off the new (CC4) credit card if possible. Repeat as needed. Usually, this only works for someone with good credit. Here's hoping it's you.

@Hal Thompson, @Russell Brazil

I recall reading some literature on what Russell was saying about no correlation between interest rates and home prices somewhere credible but I can't remember. However, I did encounter something similar in a bigger pockets post in which someone actually took the data and tried to correlate it. That I bookmarked and here for your reading pleasure:

https://www.biggerpockets.com/renewsblog/author/ke...

As far as I'm concerned, there is enough evidence that in US markets, there is no correlation between interest rates and home prices.

If you've lived there 2 out of the past 5 years or have some proof of that, why  not sell and get a tax free gain. Screw the 1031 if you can.

If you're a buyer, you want a higher cap rate for the risk you take. A higher cap rate for a buyer means you get the property for cheaper relative to the rents you collect. As a seller, you want a low cap rate because that means you can sell for higher relative to the rents you collect.

You might have made a mistake on your previous tax returns on taking depreciation. For someone like you who cannot offset your "depreciation" losses with your W-2 income, you can offset it with your passive rental income. Furthermore, if you cannot take the full depreciation amount, it can be carried over the following years, so by the time you sell there should be a large accumulated carryover loss that offsets your gains. Here's an example:

W-2 income: 100K
net rental income: 10k
depreciation: 15k

On your taxes you will report the following to be taxes:

Total income W-2 and rental: 100k (because depreciation cancels out the 10k in rental income and then some)
Carryover depreciation to next year: 5k

Let's say that's the case for 5 years and now you've accumulated 25k in carryover depreciation that you haven't used yet. Let's now say you sell for the same price you bought to make calculations simple. Over those past 5 years, you've claimed 75k in depreciation (15k x 5 years) which must be reported, but out of the 75k, 25k is offset by the carryover losses. So now you've got to report 50k in depreciation which you should've used in this case. Sounds convoluted but such is the nature of taxes. Feel free to ask if something is unclear. I'm also not a CPA but I do my own taxes and that's how I understand it.

Typically, for a high W2 earner, you benefit from the depreciation because it lowers your taxes at say 28% or higher on the rental income, but the max that you pay back is 25% when it's recaptured when you sell. Hope that helps.

The irony is that your a bit of a shark (talking about me personally) trying to get a good deal and you encounter these sharks trying to take a bite out of you. I laugh a little in my head.

It's quite confusing really. I once called a guy to replace a gas line and he did a great job with a fair price. I take him to a second home I was going to purchase to get an estimate to replace the copper water lines that are underneath a slab foundation. It needed some demo work to complete. Never calls me back despite repeated calls to him. What gives? If you don't want to do it or if the job is too hard for you just spit it out. Sheesh.