All Forum Posts by: Bill B.

@Jonathan Watt

Exactly right. It’s as if you sold a $20k gain property without doing a 1031.

@Dave Foster can probably tell you what percent of that $20k is taxed as capital gains (usually 15%) and what percent is taxed as depreciation recapture. (25%)

 You’re gonna have to go over this math again. How many errors are there?

Start small, in #2 20% of $150k is $30k not $20k, I know, $10k, who cares. 

But in #1 you have $405k in appreciation and yet you say the net gain is only $53k? I’ll take $400k in appreciation in 5 years and who cares about any other number.  If it sat empty at that rate it would be a good deal. 

I don’t know what “appreciated return” is. But you if you mean gain from appreciation you need to change property #1, line #2 from $145k to $405k and you’ll see your numbers swing a little but in favor of the California property. 

But then what do you mean by “appreciated value”? In #1 $805k is about the value of $400k at 15% for 5 years. But then in #2, you actually have a lower appreciated value than you started with, are you saying those houses are actually worth less every five years?

But once you fix line #2 on property 1 I don’t think it will matter as it will have a net gain over $300k compared to #2’s $60k. 

As I study your example. Maybe you only made a couple mistakes. Maybe house #2 is supposed to be $100k? If so then you’ve spent 1/4th as much money as the $400k house and made 1/5th as much money once you fix property #1, line #2. So your investment is worse, (80% as good) but not oh my goodness worse like it is if you did mean $150k property. (Around 65% as good.)

Tried a different iOS device and a different browser. Same fail. 

Is anyone with an iOS device having trouble with the “newest posts” portion of the website?

Starting yesterday when I click on newest posts I see the 20 newest posts but when I scroll to the bottom of ten page it used to either load more topics automatically or give me a blue tab that said load more topics. 

Now it does neither. I can still refresh and see the newest posts, but anything beyond the first 20 is hidden/unavailable. 

Ps. More people have been moving out of California than in for more than a decade. But they keep banging out new babies. That, and “international” population growth  

Pps  the population growth was 400k per year a decade ago, for the last 10 years its been 300k, for the last 3 years its been under 200k. So it is slowing, down 50% in 10 years  

“International migration to California has remained strong over the past 10 years: But about 1.2 million more people left California for other states than came to California from other states. Natural increase—more births than deaths—added 2.8 million residents. Overall, California gained 3.1 million residents over the past 10 years.”

Don’t forget simple compounding magic. A 61% gain in 10 years isn’t 6.1% per year. It’s only 4.9%. So if the historical average is 5.4% for RC, the last 10 years have actually been under average. 

Just like Las Vegas’ 150% return over the last 10 years is only 11.5% annually. :-)

Thanks for the info guys, never heard of that. But 2018 taxes should have been a k own amount with an official invoice from the state? I assume in 2019 hey can’t just make up a number for the taxes in 2018 that you already owe. 

Good luck sorting it and making it work in the future. 

I’ve never heard of a property tax being paid after the period it was allocated to. Are you trying to say they are just now collecting property tax for 2018? You’ve owned it for 6 months. I would assume any property tax they are collecting now would be for 2019. 

@Jeffrey Grieshop

Sorry if I got off in the weeds. I was trying to say that you can live a comfortable life with 4 paid off rentals and 12 will bring in more money than I can spend without wasting it. 

Very long story short I was also saying I gave up cash flow for 15 years with short amortization loans so I could retire early. 

I chose having paid off properties over having a couple hundred in cash flow per property per month. I tried to explain why with my aversion to debt and paying interest. It was part of my long winded explanation why I couldn’t care less if a property was positive or negative $200/mo. It just isnt/wasn’t life changing money. Having paid off properties is. 

Your mileage may vary. 

@Jason D.

Hey Jason. I was considering the $30k in commissions a pretty massive loss.

But, on top of that he has to sell to an investor as he has a new renter living there. I assume a year lease. So he can’t sell to anyone that wants to live there  

So if it’s a $500k rental with negative cash flow, as an investor, how much will you pay for it?  $400k? Maybe less maybe more? That’s a massive loss. He basically loses his $125k downpayment between commissions and lower price and walks away with nothing. So he has nothing to invest in this new cash flowing property everyone’s suggesting. 

He could always try to buy the tenants out but in California he certainly will be in a weak position. If I was paying $2200 in rent and just moved in it would take at least $20k to get me to move, maybe more, depending if the spouse loved the place and what I made at work.