All Forum Posts by: Basit Siddiqi

Passive losses from one rental property can offset passive income from another property.

You will potentially be spending hundreds of thousands of dollars on investments in an area.

It would be suggested to travel to the area for a few days. Visit some properties, eat at some resturants, make some connections(realtors, insurance agents, etc).

Once you visit the area, you can make a better informed decision if thats an area that you want to buy in.

Once you did this, and you are new to buying properties, I would maybe visit the property when it is being inspected.

Once you have a couple of properties under your belt, you can rely on the home inspection report.

Best of luck

In my opinion, a 401K is a retirement account just as real estate. So you are just choosing one retirement vehicle over another.

You can also consider rolling the 401K into your new employer and take out a 401K loan if your employer offers the option.
You would normally be eligible to take a loan of the lessor of $50,000 or 50% of your vested balance which would be $4,500.

Best of luck

If you have a STR, you want to have a discussion with your accountant to see if it will be considered active or passive.

If it is considered active, and there is a loss, it will be eligible to offset your other forms of income such as wages, interest and dividends.

I suppose the question is does it matter?(especially for those involved on this website)

The reason I mention if it matters on this website is because most are real estate investors(long term buy and hold) and will most likely operate at a tax loss which doesn't have an impact on taxes.

The second point is, will you invest or not invest in a good investment because of what your tax rate is?

The equity that you mention, is that just the FMV less the loan balance or is that the appreciation on the property?

If its appreciation, I think you did a good job assuming you held the properties for a few years.
If its just FMV less loan balance, i would only sell if you are unhappy with your appreciation / cash flow.

Assuming you are in the 22% - 24% federal tax bracket for most of your income, your tax would be about $76,000(disregarding standard/itemized deducitons and other income).

If you can somehow show rental losses = $300,000, you would get a refund of her federal taxes and potentially state taxes also.

Investing in a syndication requires you to understand the expected return ranges for a specific asset class.

The benefit, in my opinion, of investing in a syndication is the time you save so you can go ahead and enjoy your life while getting a stable return.

If Class A real estate is giving a return of around 8% annually, I would look for sponsors to provide you with a similar range.

if someone is offering a much different return, I would run away.

Best of luck

I think the best way to find a profesionnal to add to your market is to go to a local real estate networking event and connect with others.

Find who the big sharks are and see who they are using as agents, CPA's, contractors, etc.

I see that you mention in your post about a LTR. Your BP profile mentions STR.
You want the accountant that you choose to not only be able to help you now but also into the future.

Make sure he she understands the tax implications of investing in LTR and STR, as there are many!

Best of luck!

There are different tax laws when you discuss small business and real estate.

Small business - Home office deduction, Section 199A deduction, SEP/IRA / Solo401K, etc

Real Estate - Cost Segregation, 1031 exchange, QOF, etc

Work with a professional who understands both.