All Forum Posts by: Daniel Johnson

Not tax professional here, so definitely don’t take my word on any of this.

So, this renovation is your primary job? Are you working any other gigs during this time? Do you currently have any other rentals/real estate investments? What do you stand to benefit from getting the REP status this year? 

I’m in agreement with your tax preparer that renovating a home you currently live in wouldn’t amount to a real property trade or business. If the IRS looked at that property today, they would just consider that your home, not an investment property. Therefore trying to say that it is an investment property for REP status wouldn’t fly. 

We are having our monthly evening meetup at Fiddlin' Fish Brewing Company in Downtown Winston Salem on Thursday, 8/31/23. We will meet at 7 PM and have an open conversation about investing in real estate. If you are new to the group, we are monthly regulars here now, so just ask the bartender where the real estate group is and they can point you in our direction. Look forward to connecting!

Hey @Jeremiah Stevenson, the meetup is held the last Thursday of every month. No need to sign up, just show up!

I wanted to tag a few folks that have expressed interest in the past. @Joshua Kim reid @Mike Citro @John Kaspar @Olivia Di Dio @Chris Smith @Louis Jeroslow

Also, for the regulars, feel free to tag anyone you think might be interestsed: @Brad Collins @Michelle Kline @Jake Hedrick @Guillaume R. 

We are having our monthly evening meetup at Fiddlin' Fish Brewing Company in Downtown Winston Salem on Thursday, 7/27/23. We will meet at 7 PM and have an open conversation about investing in real estate. If you are new to the group, we are monthly regulars here now, so just ask the bartender where the real estate group is and they can point you in our direction. Look forward to connecting!

We are having our monthly evening meetup at Fiddlin' Fish Brewing Company in Downtown Winston Salem on Thursday, 6/29/23. We will meet at 7 PM and have an open conversation about investing in real estate. If you are new to the group, we typically sit inside, in the back/middle. I will be there wearing a yellow LSU shirt. Look forward to seeing you there!

Hey @Bonnie Low - we don't have an invite list, but I will send you a message with an invite to our Slack Group. I post here on BP every month when the next meeting is going happen as well.

If the loan were paid off or refinanced, it would definitely be good for the investors of the MBS. However, the discount you would demand on the mortgage would probably exceed the mark to market pricing adjustment. The US MBS index was surprisingly only down about 11.8% last year and over the last 12 mo it is now only down about .88% as of April 30, 2023. You can take a look at ticker MBB for broad MBS data. 

As a capital allocator, what is the one-time discount you would want to buy back your mortgage? If it is a 2% mortgage at $500k, would you want a 10% discount, therefore paying $450k for your mortgage? This would probably be parity for a portfolio manager at the moment, however, a newly minted 15 year mortgage might have slightly longer duration than the MBS portfolio and therefore a greater MTM discount. However, anything more than a 10% discount is probably excessive and a portfolio manager would probably just rather wait to see interest rates fall again, improving the value of their portfolio.

The sweet spot would be to have a mortgage owned by a small regional bank that needs liquidity and to move loans off their balance sheet. However, most regional banks also aren't funding 15 year fixed loans, they have left that to the capital markets. The primary constraint is that the consumer and the lender have gotten further and further apart in the last 30 years, so it is nearly impossible to buy back your loan. However, I would love to hear a success story with this, that would be pretty awesome.

This is no longer a thing. Nearly all mortgages now are packaged and sold as mortgage backed securities(MBS). There is actually no incentive for the "lender" to sell back the loan to you as the portfolio discounts are already priced into the value of the bonds based on the duration and risk of the portfolio. The long and short is that you don't have a single owner of your mortgage anymore and the servicer wouldn't have authority to sell a mortgage from the portfolio. Authorization for this would likely have to come from a director of the fund, and good luck getting them to sign off on selling your $200k mortgage at a discount to face.

Good thoughts, but nearly impossible now a days!

Hey Fay-

You are right that it is important to seek out a fee-only financial planner, and if possible a flat fee financial planner. The difference is that a financial advisor that charges on assets under management has no incentive for you to keep your PE and RE investments, and would prefer for you to concentrate your portfolio in assets they manage. 

NAPFA and XYPN are both great resources for finding a fee-only financial planner. I am a member of both of these organizations and think that everyone associated are top notch. 

Hope this helps!