All Forum Posts by: Aaron Zimmerman

@Mohammad Murad yes. It's ultimately the same property. On schedule e, you should not list the same address or two separate properties. 

there's a great episode on tax smart real estate investors on this topic that goes into more detail. 

it's generally easier to qualify if you have one dedicated property to just short term rentals 

This property may not qualify for tax benefits. The average stay needs to be 7 days or less between both duplex units. So if you have one long term rental and one short term rental, it can be difficult.

practical example: 

you have a long term tenant that stays for 365 days. You have 50 stays at an average of 3 days per stay. When you combine the two, you have 515 days rented with 51  stays. When you take 515/51, you get an average of 10 days. 

Welcome! Sounds like a great plan. Fort Wayne is a phenomenal market and I'm not too aware of the markets 2-4 unit supply but I'm sure there is some. Best of luck to you on your journey and you've taken a big first step by committing to buy a property. I'd encourage you to do it as Much as you can for as long as you can

It all Depends if you can utilize the losses in the current year. You wouldn't want to pay $3k for a cost segregation study just to accelerate depreciation and losses you would not use. 

There are a couple workarounds to this if you're looking to take losses against active income.

1. Real estate professional status. You would need 750 hours and more than half your time (this could be you and your spouse).

additionally, you would need to materially participate in your rentals. There are 7 tests but easiest way is to work 100 hours and more than anyone else's time. 

2. short term rentals

requirements: average stay of 7 days or less, 100'hours and more than anyone else's time (or one of the 6 other material participation tests), not use it too Much for personal use, and not hire a property manager. There's some nuances here but the high level is assuming you meet the above, you can turn these losses on the property against active income.

to start, I would learn the fundamentals of bookkeeping, making sure you maximize expenses, and then focus on the more advanced tactics.  

It is possible without a doubt but there's quite a few pitfalls.

1. Keeping a time log - this is your audit defense. Keep detailed records. Many investors don't. 

2. Understanding which hours count and which hours don't. Working with a cpa, you will want them to review your time log thoroughly. 

3. You have to have at least 5% equity in the business. Working a job within real estate (I.e. property manager) with 0% equity in the business does not qualify you. 

4. not materially participating in your rentals. You could work 750 hours and more than half your time in your main real estate business, but not materially participate in your rental properties and this whole strategy could be for not.

Lots of considerations with reps status and lots of pitfalls. You will definitely want to work with a real estate cpa that can guide you through. 

I would recommend a separate credit card and bank account as it makes bookkeeping easier. If you'd like I have a spreadsheet specifically designed for house hackers that will help report on your taxes. Biggest thing is understanding rental (deductible) and personal (mostly non deductible) percentages. 

While you're saving, I'd look to do the following: 

1. educate yourself on house hacking. For someone that's 19, if you can get into multifamily every year/every other year by moving around and house hacking, that'd be incredible.

2. Adjust savings plan: I would probably look to save aggressively first towards first buying a house hack. $30-45k seems about right with reserves included. 

3. go to local meetups and network with other investors. Your early stress will come from not knowing the right people. By networking, you'll be able to meet more of the right people. 

I think@Jonathan Klemm would know this as he's a GC and probably has had previous experience working on projects like this 

Put another vote for housing hacking

@Sartaj G. Buying a vehicle for business purposes for one rental would be a bit of a hard sell. You could deduct mileage to start. 

for REPS, you'd ideally want to have your wife be in a real estate business such as realtor and then her manage the rental properties. Much easier to qualify for reps but I'd work with a cpa to help determine which hours count and which hours don't.

theres not necessarily a minimum age but something reasonable. I would think a 12 year old could be capable of doing bookkeeping