New to investing

[Marcela Molina]

I have been following real estate investing for some time, and I have officially decided to get started. I am currently studying the BRRRR method, DSCR loans, house flipping, and market analysis. If anyone has recommendations for podcasts, books, or learning materials, I would greatly appreciate any suggestions!

[Ashish Acharya]

Good time to get the tax side sorted while you're still studying BRRRR and flip mechanics, since they're taxed completely differently and that changes which one actually makes sense for you. BRRRR properties are rentals, so you get depreciation and passive treatment, and pulling equity out through the refi isn't taxable, it's just cash in your pocket from the loan. Flips are the opposite, ordinary income, and you're likely paying self employment tax on top if you're doing enough of them to be considered a dealer, so the margins need to be bigger to land at the same after tax number as a BRRRR hold.

On the DSCR loan piece, interest is a normal deductible expense once the property's rented out, but during rehab before it's placed in service, that interest usually gets capitalized instead. Good thing to keep in mind when you're running numbers on a BRRRR deal.

Happy to connect!