All Forum Posts by: Basit Siddiqi

Biggerpockets recently came out with a book on real estate strategy.
You may want to give it a read.

State with Strategy by Dave Meyer - https://store.biggerpockets.com/products/start-with-strategy

Some important tax / accounting considerations when you have a syndication.

You want to deliver the K-1's to your investors in a timely manner or a time that you promised.

You want all the information on the K-1 to be accurate such as name, address and social security numbers.
If there is one slight error, while it may appear small, can lose a lot of faith if you are not doing the small things correctly.

Best of luck to you!

Amount of rentals to retire = Cash needed for your lifestyle / cash-flow per property.

Also factor in tax into this equation

Best of luck

We can determine now that investments have performed well when investing in 2008 and prior to covid because some time has past.

The thing with investments is that no one can predict the future.
People made an educated guess in 2008 and pre covid to invest in real estate. Luckily, most people did well. However, there are some that didn't do so well.

You will know if your investments do well / bad by investing and taking the gamble.

My recommendation for best practices if you don't plan to have an accounting software is to have a separate bank account with only your rental related activities.

At the end of each quarter, export the banking information into excel and then categorize the transactions.

I also read your profile about raising capital.
If you get into that stage, It would be better to have an accounting software, you want to be able to have a tracking of all your income, expenses, capital contributions by partner.
You also want to look professional to your investors.
If they ask for the information, you can provide them a nice standard report generated by the software instead of excel.

You live in Jacksonville which is a market that has homes at the lower price point compared to the nation.

I would do one of two things

1) Get a new property via 3.5% down and use the rest as reserves
2) save up another $10,000 and then buy a $125,000 home using $25,000 down.
This will give you $10,000 as reserves just incase something goes wrong

Best of luck.

The cost segregation will analyze the property to find assets that can be depreciated faster than 27.5 years.

The accountant you work with will be able to help connect you with a cost segregation specialist.

The most difficult part is completing form 3115 which will also calculate the 481(A) adjustment.
The 481(A) adjustment is the difference between the correct depreciation calculation less the actual depreciation taken.

I agree, the US is more friendly about receiving investments from foreignors.

You are planning to move back to Spain?
If so, are you concerned about Spain's tax system on worldwide items?
I am not an expert on the spanish tax system but I am reading upon it - It appears that your worldwide assets(Properties in the US) would be subject to Spain's 'Wealth Tax'.

Spain is a great place to live...but their tax system is killer

I lived in Madrid, Spain for about 8 months and I am curious if it is possible for non-residents to successfully have rental properties within the country.
My concern is mostly from a tax standpoint and whether it makes sense.

My research shows that 
Non-residents of Spain(but a resident of Europe) pay a flat rate of 19% on NET RENTAL INCOME.
Non-residents of Spain(Not a resident of Europe, such as the USA) pay a flat rate of 24% on GROSS RENTAL INCOME.

The difference of paying tax on Net and Gross is huge.

Americans are not able to deduct expenses such as mortgage interest, taxes, insurance, cleaning, repairs, etc

A pro that I can think about when it comes to invest in Spain is that overall costs are less - Mortgage rates are currently around 4% - 4.5% while it is around 6.5% - 7% in the US.

Am I reading the tax law correctly?

Are there americans who are making the numbers work?
I would love to hear from others who are making it work and what the numbers are like.

I agree with others have said, if they can make 24% return, why wouldn't they just borrow at a hard money rate and just make the 24% themselves.