All Forum Posts by: Raman Bindlish

I am a buy and hold investor and I have been in acquisition phase where I am buying properties and fixing them up and renting them out. In the process, i am accumulating a lot of passive losses every year. Without considering taxes, it get added to equity and I grow my portfolio price but I am not sure if I understand how to benefit from these passive losses in terms of making my investment tax efficient in short term and long term. 

Question: If my net cash-flow from various properties is negative (due to large rehab projects in some of the properties), how best to log them in my tax returns? Is there a way to carry them forward? Or if not, how can I document them to ensure that I can add them to my purchase price when selling to reduce my capital gains taxes?

Some background

- I have a full time day job and nowhere near being classified as Real Estate professional

- All my properties are using conventional financing

@Katherine Kwan As they are different kind of neighborhoods and properties, it won't be fair to compare as is. But as I am self-managing Sacramento property, it has not been easy in terms of pain factor. As I have a pretty good property manager in NC, it is much easier over there. Also, the neighborhoods I could invest in out of state are much better as price points are lower.

In terms of returns, I have owned these properties for one year only, so time will tell. On paper, both should cash flow for times to come. I had to go through eviction for one of the tenants on my Sacramento Duplex, and I am remodeling the unit now, so it will be negative for this year. 

@Noah Mellor Agree, Success with out of state investing depend heavily on how good is your property manager. I vetted my property managers first before buying the properties out of state. In fact, this was one of the criteria for me to choose the market I invest in. You can PM me and maybe we can connect and share thoughts. What markets are you researching for out of state?

@Katherine Kwan Welcome to BP.. Glad to see more investors from bay area on the forums.. I am from bay area as well and investing in Sacramento and out of state (mostly NC). 

I am looking for a moderate rehab for a property (windows, flooring, dry wall) and potentially adding a bathroom etc. It is for rental purposes. Any recommendations??

Looking for advice from anyone who is self-managing property in Sacramento (from outside). I am in bay area and got a duplex in Sacramento. We received a rental inspection registration form from city and we filled it up. Now, they sent it back to us saying that the contact address should be within 35 miles radius of property which we are not. Any suggestions?

I used many different credit screening services but now I have a case where the tenant is not using email at all and he does not even remember his email password. I tried so many services and all ask the tenant to check their email and provide consent for sharing the report. Can someone guide me a tool where I do not need any action from tenant for running credit and background check? I got a paper form filled with a consent from him to run his credit, so I am wondering how to go about doing it. 

Before looking for investment and city to invest, think about your goals. Real estate is easy to get in but it is not always profitable if you do not define exact criteria for your investments.

1. Are you willing to  spend effort for rehabbing a property or you are looking for rent ready options with a certain cash-flow target? And if this is the case, why not invest in completely hands-off options like multi-family / commercial syndicates who can help you give decent returns. 

2. Do you plan to invest it in all cash deals or you have capability to leverage it with mortgage? E.g. with 25% down, you can use 40k to buy properties worth 160k. In some cases (SFR), you can even leverage it upto 200k.

3. Area to invest depends on what you can really control. Buying a great property in a good city and not being able to manage remotely will kill all your profits. E.g. one month of vacancy can almost eat into all the profits from previous year.

In today's market, I am inclined to invest more in multi-family properties where an experienced investor is managing everything and I am just an investor. This is best way to invest if you do not want to be hands-on. 

PS: I do own SFR and small multi-family as buy and hold. these are properties for long term passive income. So, my criterion is simple - build buy and hold portfolio for long term. Keep investing in good commercial deals that give you cash flow for short term and keep you liquid for future opportunities like 2009-11.

I am not sure if you are planning to link it to rental listing sites (like zillow rent manager, cozy or other such websites) or just analyzing emails from these sites when potential tenants show interest, but it would be good to consolidate all rental applications and maybe even sending an automated response for each applicant with standard questionnaire and guidelines. This is something which will really help landlords who are operating at small scale with no dedicated property managers.

@J. MartinI was on the fence and your message made me buy the ticket. See you there. 

It looks like we will see a lot of familiar faces from bay area.