All Forum Posts by: Amol Kulkarni

Thanks Randy. Yes, with a W2 job, it's next to impossible.

But I'm wondering how someone who doesn't get a W2 income, can be classified as a RE professional if the property is out of sate and is managed by a local property manager? Is that even possible and allowed? Managing a property manager wouldn't take 2 hours a day (for the 750 hour test), assuming that is even counted as material participation.

Hi all,

I've been reading about the Passive Activity rules that prevent passive losses (eg Depreciation) from being offset against ordinary income. Unless of course, the taxpayer shows material involvement and claims to be a real estate professional, spending 750 hours per year.

Employing a property manager to manage out of state properties makes it virtually impossible to stay actively involved and spend 750 hours. 

I'd like to understand how people are dealing with this. Is there a way to still stay actively involved with property management in place at the property? Or is the only option available to carry the depreciation and losses forward? 

Would appreciate any thoughts and insights on this.

How common is it to find clauses in property management agreements like the following:

1. The PM can terminate the agreement with a 30 day written notice, but there's no option for the owner to terminate the agreement 

2. In the event of termination, the PM is entitled to the commissions for the remainder of the lease term.

3. In case the property is sold, the PM is entitled to 3% commission of the sale amount if the property is sold to the tenant or 6% if sold to someone else (!!)

I've seen variations of these from multiple PMs in different states. In all cases, these PMs come highly rated by owners, so they're clearly good at what they do. But I'm having a hard time agreeing to these terms. 

How have owners/investors dealt with such clauses short of walking away from such PMs?

Hi Dave, I'll be in Cleveland only Friday and Saturday, April 7 & 8. I'm not sure there will meetups this weekend, given that it's Easter, but if there is one, I'd love to join.

Hello all, 

I'll be in the Cleveland area for a few days and would like to meet some of the folks active in the market here. Perhaps I can interest you in a coffee and some interesting conversation? Just looking to make connections :)

Regards,

Amol

While browsing listing at some of the websites, I came across Self Storage units, Campgrounds, RV Parks and Mobile Home Parks.

Some of these seem to be pretty reasonably priced compared to multi family rentals. I'm wondering, though, what would be the catch in each of these, especially for OOS investments? 

Many of these are in rural areas/small towns where I guess it would be difficult to find property management. What would the other potential pitfalls be? Any insights or advice would be appreciated!

Hi all! How do we keep tabs on the property managers from out of state? 

I realize that with large professionally managed companies, things are mostly OK, but some of the properties I'm looking at are in rural areas with tenants doing double-duty managing the property.  

How does one go about making sure they're being honest?

Thanks @Nathan Gesner! I agree this is a great tax shelter benefit.

Thanks @Max Ferguson and @Ben Scott. This is helpful!

Hi all, new here and just starting out, and have a bunch of really basic questions so please bear with me :)

If I were to buy an old property that is past its depreciation period, is there any form of depreciation I would be able to claim?