All Forum Posts by: Cara Sherman

I had my regular (not real estate focused) accountant do my taxes this year and he came back with a huge bill. I was looking last minute for someone who could get me a second opinion and found someone on the BP forum: Jose Garcia Venegas from Pacific Creat Advisors. He took a Quick Look, quoted me $2k to redo my taxes and said he'd thought he could significantly reduce my liability and could get them done in time to file. Great. I sign an engagement agreement and stop looking for someone else. I have to follow up multiple times and finally the morning of the day before the extension deadline, I text saying I'm worried that I haven't seen anything and he says he'll have drafts that evening. I texted back: "They're due tomorrow! If you couldn't do this project comfortably so have preferred you not take it on."  Then at 12:30om he emailed me terminating the engagement. Noon the day before taxes are due! He left me totally in the lurch for finding a second opinion. In my opinion he has no business being on the BP forum or getting clients here. Is there a way to get him taken off? He's totally not a reliable tax pro...

Quote from @Hans Olo:

Quote from @Cara Sherman:

I’m a huge fan of keeping cash flowing long term rentals. At a $700/mo cash flow you’re getting $8,400/yr, which is the equivalent of having $120k saved in cash that you are drawing from at 7%/yr. You won’t get $120k in clear profits if you sell. Plus you get tax benefits with write offs. But don’t forget to put some money aside for things that come up (new garbage disposal etc) sk your $700/mo should maybe be more like $625. But even at that cash flow, I still would hold. 

Thanks very much for the reply!  These are great points. Now in my scenario, if I did sell, I would use the proceeds to payoff a $70k HELOC that I have on my primary home. Presently paying about $400 per month on that.  What are your thoughts in this scenario? Still more of a benefit keeping as a rental? Thank you!

I would still keep it. Use all the cash flow to pay down the HELOC faster. The HELOC rate is probably variable and ideally will go down substantially in the next 12-18 months. $70k isn’t nothing but its manageable and you can pay it down w your cash flow over a few years and still have this cash flowing asset. but please for the love, make a hard promise to yourself to raise rents annually. Nothing crazy, maybe 4%. If you’re worried about losing a tenant, offer them half off the first month w the increase. The key is to not get yourself years and years behind. 

I’m a huge fan of keeping cash flowing long term rentals. At a $700/mo cash flow you’re getting $8,400/yr, which is the equivalent of having $120k saved in cash that you are drawing from at 7%/yr. You won’t get $120k in clear profits if you sell. Plus you get tax benefits with write offs. But don’t forget to put some money aside for things that come up (new garbage disposal etc) sk your $700/mo should maybe be more like $625. But even at that cash flow, I still would hold.