All Forum Posts by: Daksh Raheja

Me and my wife are planning to start REI. We have high w2 income and would like to offset it using paper loss strategy.

Here is what I am thinking.

We are planning to get one STR every year, manage it ourselves to have material participation in it, Do a cost segregation and accelerated depreciation in year 1 to have active paper loss and offset our W2 income with that loss. Then next year transfer it to either a management company or do LTR and rinse/repeat.

Let me know what am I missing here. Or should I look at  starting the traditional way of LTR and forget about deductions to our w2 income. 

We don't have a CPA currently and would love to connect with someone who has experience in real estate. 

Not really. It would be good if we can use it once in a while but that's not the reason for this. 

We need to manage it ourselves, so going farther will be become harder as we work full time

@John Underwood i initially thought of the same, but after some research i found that using STR and managing it myself would allow us to get the deduction on our w2 income, by going accelerated depreciation route. That would be huge help as we have high w2 income.

My plan is to get a new STR every year, try to manage it ourselves and either convert to LTR next year or hire a management company to take care of STR.

We are planning to start our real estate journey and hoping to get our first STR this year. We would like to be within 2 hours driving distance as we are planning to manage it by ourselves.

We are okay with taking up a mortgage as we only have 1 from our primary home in OC. Would like to be ideally less than 500k, but can go up tp 600k if cash-on-cash returns are good. 

After doing some research, it seems most of the places like Joshua Tree area, Palm Springs area and Big Bear are over saturated. With the current home prices and interest rates it seems it would be very difficult to just break even with high vacancy and low ADR these days. Also most of the Cities are not allowing STRs anymore in SoCal.

We wanted to start locally before we venture out of state, but do you think it is better to start Out-Of-State right away or are there some options locally? I haven't looked at or researched anything out of state yet.

Any input from current STR Investors or Realtors will be really helpful. Thanks