All Forum Posts by: Aaron Zimmerman

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

@JD Martin hit it on the head. Very simple but sometimes hard to do.

otherwise, your other option is be extremely useful to a local real estate investor. 

DSCR rentals for sure. With flipping, you’re incurring very easily 30-40% taxes. All else being equal between the two strategies, when you lose 30-40% off the bat to taxes, your money generally doesn’t compound as quickly.

Why not house hack another property? The plan for the medium term rental seems good so long as there is rental demand there. 

I do think the tax benefits are often overstated. I've seen a few cases in my time where they're effective. 

1. passive income being offset with bonus depreciation. Some people have interest in passive businesses making taxable income. 

2. Syndication ladder where you buy investments at various times and use bonus depreciation to shelter any gains on older investments.

I think the fix and flip is a prime example of people I see not understanding tax impacts. A lot of people are surprised that the irs and state takes 40%. I often tell my clients brrr is more tax efficient and to consider this strategy if it fits In with their long term goals 

One other important thing to highlight is that just because you're a real estate professional does not necessarily mean you can deduct rental losses. You must also materially participate in your rentals.

I agree completely with@Paul De Luca. Pay off the high interest debt (credit cards) asap. Then, aggressively save towards buying a 2-4 unit. Chicago has loads of 2-4 unit inventory. It has Gotten harder to find property with interest rates and low inventory but not something to get discouraged over.

I'd recommend going to some local meetups to prepare yourself for your house hack by meeting people and listen to the straight up Chicago investor podcast