I have been trying to get a distressed/value add LTR property under contract in my local market for some time now.

conventional 25% downHow did you add value to the deal?

I feel like it's important to note that there's a section of tax law, Section 280A, that is specifically designed to prevent deducting expenses related to a personal dwelling.BTW, Section 280A is the chunk of tax law that creates the Augusta loophole, sets the rules for home offices, provides the formulas for deduction calculations for vacation properties.A generalization: If someone has a dwelling they use personally and also use for business, Section 280A basically limits the deductions to the actual true income received.P.S.

And I feel the most limited sympathy for it.

Starting out in real estate can feel overwhelming, but breaking it into clear steps makes it manageable.

So if you are doing an addition, you are only contributing to the structure portion of value, not the land value.

To make the strategy successful, you need to find a property that can be acquired below market value.

Coffered ceilings, low corner additions etc.Anyone can slap lipstick on a pig, looking for high value add in high demand markets is where the $ is.

How did you add value to the deal?

I’d highly recommend speaking with a CPA who understands both states’ tax laws to optimize your structure.If you need any local insights on property management or investment strategies in Oregon, feel free to reach out.