All Forum Posts by: Aaron Zimmerman

Rebecca - it's definitely more challenging to make the numbers work now compared to a few years ago. However, there's a variety of ways to boost cash flow/get better deals. 

1. buy deeper and do value adds. Generally you can get some equity and then set yourself up well for cash flow later once units are renovated.

2. Rent out some of the rooms with short term or medium term rentals to boost cash flow.

3. Buy in areas that are less susceptible to large insurance increases (which is getting harder to do)

Well put. I think the biggest advantage of this bill for real estate investors has to be 100% bonus depreciation

You've definitely got a great start for sure! 

A few strategies that may work for you:

1. Partnering with other investors and buying larger properties. You can do this through direct ownership or through passive syndications.

2. Doing BRRRR - this is a very efficient way to recycle your capital.

Andy - great post. do you know if this applies to fha loans?

one correction - PMI is deductible as insurance on schedule e.

@Tiffany Situ you need to prove that it's a short term rental. How would you prove it's a short term rental without any stays. Someone else could argue it's a medium term rental and therefore ineligible for short term rental loophole. The stays ultimately substantiate the claim. 

I would look to rent out close to fmv or give a slight discount to get someone booked especially if there's minimal reviews. I would not rent out to friends or family that pay below fair market rate as this could also be considered a personal day which would negate any benefit of the short term rental loophole. 

You need actual stays, at a minimum 2. If the property has two stays or more, you're generally ok. I'd consider getting everything furnished ASAP. 

Don't forget that you also need to meet material participation requirement. In your case, it'd be 100 hours and more than anyone else's time OR substantially all the activity (which is more subjective). Either way, you'll want to document everyone's time in the activity that works on the property.

Assuming no rental, this would be long term capital gains. I'd look to work with a cpa to see what your basis in the property is including capital improvements and then put together an estimated sales price. You're often netting less than you think with closing costs both on the purchase and sale 

I don't know too much about wholesaling but you would need your realtor license.@Paul De Luca@John Warren would know the ins and outs of what you can and can't do

Welcome @Will Kilby. What strategy most entices you? To me, it seems like you have a natural advantage with short term rentals as you help your parents manage them. Could you buy into the same market as them and self manage them? Short term rentals also can produce more cash flow compared to long term rentals. 

I agree that you should have cash reserves. I'd say $10-15k is generally sufficient. Plus you'll need down payment and closing costs. I'd use your first year out of college to save, get to know your local market, and network with other investors. Jumping in too quick can also do you a disservice by overburdening you