All Forum Posts by: Alicia Marks

My strategies for lowering my 2022 tax bill started in 2021 when I heard the REPS episodes on how to offset the taxes I pay on alimony and gig work. I became obsessed and listened to multiple ones repeatedly. I purchased a hoarder house/fixer upper in Nov 2021 with the absolute intent of logging my hours of self renovation and self management after renovating my other rental myself during COVID.  I downloaded the REPS tracker and realized that even though my hours will add up to considerably more than 750 or more and 51% of my time, those hours WITHOUT renovations would be hard to come by! I perform most maintenance too. I like most people probably overestimated my time spent "managing" rentals.

I'm now in the long term, furnished rental market. So I formed a Property Management Company in January 2022 that creates Long Term Rentals for Group Home Living spaces  and manages them (my "Real Estate Trade or Business").  The PMC purchases furniture and furnishings, sheets, kitchen utensils, etc, collects the rent from the residents, then the company pays me, the Landlord, a set Rent amount regardless of occupancy. I intend to scale and the company allows me to reuse/redistribute furnishings. 

I performed a CostSeg Analysis, but was later told by my CPA that I can't use it because my Property Management company that manages my residence I did the Cost Seg on is SEPARATE from my Real Estate Holdings and won't yield a direct tax benefit, even though the house the Company manages is run on my Sched E. I think he's incorrect. The Company was formed as a C-Corp, which was an error on my part so I'm switching to LLC. The House is in a separate LLC.

Strategies for 2023, buy another fixer upper, repeat, while self managing and build a name for my Company locally as the "go-to" place for Group Home Living.  

@Alicia Marks I am going through this same thing, with finding a new PM. My first PM said a house was in great livable condition and then after the tenants sent a certified letter to the county and started a Rent Mediation situation they did a full inspection and gave me a long list of items and said fix it. Bad PM has made for a real bad time and with our names on it we are not happy! Hard part about OOS investing is I think this PM thought they could take advantage of me.