All Forum Posts by: Basit Siddiqi

It scares me when it is mentioned that something always has to happen...
Yes - Historically Manhattan prices have increased.
However, Manhattan prices in the future can increase, stay flat or even decrease.

@Daniel L Gorgone

Considering you guys are so close to retirement makes me hesitant to suggesting to access the funds from your retirement annuity.

It appears that if you sell the Brooklyn condo and buy SC properties; you may potentially pay $37,500 in tax(assumed 100% capital gains and non depreciation recapture).

Have you looked into doing a 1031 exchange? 
I don't know the Myrtle Beach area at all; but after doing a quick google search it appears median home sale price is $116,000. You could potentially trade your Brooklyn Condo for 4 Mrytle Beach homes and achieve greater cash-flow. 
The 1031 will allow you to defer the taxes on the Brooklyn condo.

I am also a little skeptical that you are able to charge $2000 for rent and net $1400 after expenses. 
A general rule of thumb is your expenses will be 50% of your rent. Furthermore, considering this is a condo would suggest that there are HOA fees which should eat into the rent more. Are you factoring in repairs, vacancy, capex(if not done by the HOA), property taxes, travel etc?

credit card utilization at 90% is high. Is it realistic to lower that?
How long ago was the charge off? I think it gets removed from your credit profile after 7 years(don't quote me on that).

To a happy retirement!

@Israel R. Were you able to find a CPA?

If you have not yet - try doing the following

1) create a keyword alert for "California" and "livermore". You may notice that a lot of the same posters chiming in topics with those keywords. Network with them and see who they use for a CPA

2) Attend real estate meetups/networking events. Network with some colleagues there and see who they are using.

If you are still having difficulty finding someone local - you may want to look for an accountant remotely. There are many CPA's here on BP who work remotely.

I am not certain you are able to claim a 179 expense when dealing with a rental business.

If you do flipping/wholesaling - you may be able to utilize section 179 expense.

@Jinyu Shao

historically prices in Manhattan always seem to go up. However, I would caution the outlook for the next couple of years. There has been a large supply of buildings built in the past couple years with more in the near future.(LIC, Greenpoint, Williamsburgh, South Bronx, Jersey City, Hudson yards etc).

The increase in supply will likely drive stability in prices for at least the near future.

I am a NYC Resident and I invest out of state. In my opinion - there are other areas that will generate a better rate of return.

In regards to the taxation portion. it depends on what your basis is in the property.
considering the property is now a rental property - you are depreciating the property and the basis of the property every year.
So when you sell the property you dont take selling price minus purchase price = gain. You take
selling price + depreciation taken - purchase price to calculate the gain.

Let me know if you have any other questions.

@Daniel L Gorgone

Hi Daniel - Welcome to Biggerpockets!

You can look into getting a HELOC or look to see if your bank will allow you to do a cash-out refi with your condo.

What did the banks say was wrong with your credit that is not enabling you to get a mortgage?
If they did tell you what is wrong - is it an easy fix?

In regards to the poster above's suggestion in forming an LLC.
Commercial/portfolio lenders will not lend to a newly formed LLC where the LLC member has little to no experience in real estate without a guarantee from the LLC Member. When you act as a guarantee - your credit profile will come into play.

how is the gross rent on a 9 unit only $36,300?
36,300 divided by 9(amount of units) divided by 12(amount of months in a year) = $336

$336 is an really low amount to be charging on rent. I am not sure if some of the units are vacant?

I do not think how much a bank would lend on a property should have a bearing on what you should pay for a property.
if you think its worth $163,000 - offer that amount and see what he says.

I think "the ultimate beginners guide to real estate investing" came out many years ago when people were still recovering from the great recession.

Since its posting - there has been many investors bidding up the price of real estate.

With that said - it is harder and harder to come across 2% deals. You may need to reach out to C/D neighborhoods to get that 2% rule.

When real estate prices fall during the next recession - You may be able to find 2% deals more easily.

@Ryan Thurm

Welcome to BP!

Congrats at having a very healthy 403B balance at such a young age!

I used a 401k loan to fund the downpayment of my first investment property.

I do not think there is a difference between taking a loan against a 403B or a roth 403B. 
When you pay back the loan - you will be using post tax dollars to pay back the loan.
Ex. you make $1,000 gross paycheck which comes out to $750 after taxes. You could use the $750 to pay back the loan(but you can't use the $1,000).

Just as a reminder - If you decide to take a 403B loan - you will need to pay the loan balance in full within 60 days of leaving your employer or being let go. Otherwise you will be subject to taxation and penalty.

@Matthew Jure

Cleveland has experienced population decreases since the 1960's. Cleveland also had a lot of employers leave after the most recent recession. With that said - I am hearing great things about Cleveland in recent years.

Congrats on your househack and being able to life a debt-free lifestyle!

If you do not get any recommendations in this post I would do 3 things

1) create a keyword alert for "Cleveland" and "Lakewood". You will notice frequent posters on topics that have those keywords. Reach out to the frequent posts for who they use for a CPA.

2) Attend local real estate networking events and ask the attendees on which CPA they use.

3) If you are still having trouble - you may want to reach out to a CPA who works with clients remotely. I, along with others on this website, work with people remotely.