All Forum Posts by: Darius Ogloza

Your best bet is to do a house hack of one kind or another. A duplex, a SFR with multiple extra bedrooms, or a SFR with an ADU or JADU. You can secure the best available financing (available only to first time home buyers) for a partial investment purpose if you do one of these kinds of deals.

If you are willing to pay $19,500 for information that, with a little work, you can pull together for free or for the cost of a dozen or so paperbacks, you are too lazy to make it as a real estate investor.  

Losing money stinks but there's times you have to pull the band-aid off fast.  This property is obviously causing you stress.  The longer you hold it the more stress and financial pain (carrying costs) you will endure.  I would do a dramatic price reduction (2x the cost of repairs needed to get it into shape) and see if some one bites.   You can always resort to options 1 and 2 if option 3 fails.  

This definition is new to me (I am focused on LTR).  Good to know this exists.

I wonder if the IRS has issued any guidance on the 7 day rule excepting STR's from the definition of "rental activity" or on how "material participation" is going to be interpreted in this context? I suspect they are going to approach logs with some degree of skepticism, especially when you are working 2,000 hours W2. Also, persuading professional cleaners to log time may pose an issue. The incentive is going to be to lean toward enlarging rather than diminishing their hours.

This quote below is from your link with bolded emphasis by me:

So, even if you materially participate in running your rental properties, you still can’t deduct those losses against other nonpassive income. That is, unless you meet one of the following exceptions:

• You can deduct up to $25,000 of losses from rental real estate activities (even though they’re passive) against earned income, interest, dividends, etc., if you “actively participate” in the activities (requiring less participation than “material participation”) and if your adjusted gross income doesn’t exceed specified levels.
• If you’re a qualified real estate professional, then your rental activities aren’t immediately considered passive. To be regarded as a real estate professional, you must perform a substantial amount of real estate business, defined as more than half of your time, and at least 750 hours, spent in real estate trades or businesses. 

In short, in the context of real estate, the majority of your time has to be spent in real estate activities (usually full-time workers in other professions fail at this level of the test because convincing the IRS that you work two full-time jobs presents a problem) and the time spent must exceed 750 hours.  

Again, a CPA can confirm this or tell you I am full of sh*t.  

I am no CPA (and you should consult with one) but how do you plan to meet the IRS material participation rule with a $400K W2 job.  I do not see how it can be done.  If I am wrong, someone please enlighten me because I have been leaving a lot of film on the cutting room floor.

In my book, anyone who tells you what the world will look like in 50 years is almost certainly a huckster looking for grant money or addled by confirmation bias.  Trying to forecast that far into the future is not prediction; it is prophecy.  Who predicted the internet or I-phone in the 1940's or 50's?   

And yes, we do own Gulf front property in Florida.  We have owned since 2001.  The property has roughly quadrupled in value since we bought it.  We took a hit from Ian last year and Charlie and Irma put a scare into us back in 2004 and 2017 , respectively.  Insurance (yes, wind policies are expensive) covered our repair costs in full.  No hurricane season in the last 20 years has come close to being as bad as 2005 - the last 18 years have been mild compared to that whopper of a season.

And yes, I am in the market to buy more.   If you own ocean front, especially somewhere between San Diego and Huntington, and are willing to dump it because climate change concerns, please drop me a line.   Maybe we can make a deal.  

I have kicked the tires with a few small investments in both long-term and vacation rentals offered on the website over the last few months.  Too early to tell but the concept is interesting and the properties appear to be reasonably vetted.   Also, the rate at which new properties are being snapped up suggests that there is quite a bit of interest among the investing public.   

@Account Closed

Guys: I am sitting in a house on the east side of Toledo OH.  30% of the houses here are basically empty.  Prices range from $5,000 to about $85,000.  If I were a younger guy I would see a ton of opportunity in buying some commercial just over the bridge to develop into work-live space.  You can only say supply is restricted if you define your market as a particular city or metro area.  What is the proper market definition?  We can debate it for days and ultimately not agree.  Two things are past any debate, though.  

There are tons of East Toledo's out there.  

And there is no more fundamental right than the right to travel.  

Just because it is a fundamental right does not mean that the government has to buy you a car.

Bottom line: since 1960, the highest homeownership rate in the U.S. was in 2004 when conditions were optimal for homeownership the rate hit 69.2%.  Most recent data has the homeownership rate at 65.5% - a 3.7% difference.  This does not a "crisis" make.  Assuming 130,000,000 households in the U.S. today, we are looking at about 4.8 million potential homeowners, most of which would be homeowners but for the interest rates on conventional loans being ridiculously high.  

There is no boogeyman (institutional investors, landlords, mom & pops, etc).  Or if there is, then the boogey man  has lost his mojo.