All Forum Posts by: Aaron Zimmerman

Zelle/paypal would be another option

@Dan H. totally fair on that point. Everyone has their own ways of calculating. I agree that total return should be evaluated too before considering any selling decisions. If it were me, as a buy and hold investor, I'd probably keep as there's a lot of selling costs and tax inefficiency with selling (although that can be avoided by doing 1031 exchange). 

totally fair comments@Dan H. and I appreciate your view. 

@Christopher Costea you're kind of betting on the investor to perform. You're essentially lending out first or second liens notes. Goal is to get at least 8-20% interest. In my opinion, debt is less risky than equity provided you put money with the right investor

When evaluating whether to keep or sell, you should be looking at return on equity which is quite low. You have probably $400k in equity and the cash flow is probably not great, maybe $1k per month. That means you're getting 3% return on equity and that could be better deployed elsewhere. If you refinance, the property probably doesn't cash flow. 

I would look at@Ashish Acharya's comments for a detailed explanation on exit strategies to consider. 

It depends What you're looking to achieve. In my opinion, the best use of retirement funds is to do real estate notes and earn a steady return. The reason why is because you can still net a good return and otherwise if you were to do real estate notes normally, this is taxed as interest.

Investing in real estate deals in certain retirement accounts brings about many complexities including UDFI. This ultimately reduces your return on an otherwise tax efficient asset.

I echo the sentiment of not letting the tax tail wag the investment dog. You want to buy a property for its fundamentals and then the tax benefits are worth it . 

You would need to elaborate more on your situation to see if you can use the losses against active income. If you make too much and are not a real estate professional or in short term rentals, you won't be able to deduct the losses (the losses will accumulate for later use). 

Hi@Diego Villasenor! Welcome to Chicago and congrats on getting the property in Pilsen under contract. Great area. 

I would recommend getting involved in local meetups and listening to the straight up Chicago investor podcast. There's some even on the straight up Chicago investor website. 

as for the mindset of purchasing deals, I'd make sure each property you house hack cash flows after leaving. I would look to acquire as much as possible so long as the property cash flows after you leave and it reduces your housing expense. I wouldn't play the rate game as who knows when/if rates will drop.@Dave Meyer had a great podcast recently about the future of rates and his concerns with the US debt that I completely resonate with. Try to lock in that rate for 30 years if possible. 

@Ladarius Robinson - congrats on your first renter! Very exciting. I would take a look at schedule e on the 1040 for all the common expense items. I also have a standard spreadsheet template. Feel free to pm and I'd be happy to provide

Congrats on the property. Seems like a good deal once you deal with the work that will need to be done! Keep going as long as you can with this strategy. I have a client that has done heavy value add and it's paid off nicely for him. 

I would not recommend the property if you're having a $20k operating loss once stabilized. Ideally you're able to get some return there with cash flow, even if modest in year 1/year 2. 

are you saying that you'll lose $20k per year once stabilized?