All Forum Posts by: Daniel Dietz

@Adam Rasmussen, @Ronan Donnelly or others,

So far I fall well within the <100,000K to reap those loses up to 25K, which are great.

My question is looking forward 5-10 years, when I *might* sell a few rentals. Say if I have 50K of W-2 or K-1 income from my day job, and I sell a rental and have a capital gain of 200K. Does that mean I can not take up to that 25K of losses that year?

Thanks, Dan Dietz

@Linda Weygant

In #2 above with income under 100K, aren't your 'losses' limited? I have read (which can be dangerous at times ;-) ) that you can only deduct up to what puts at ' -25K'.

I have always assumed that this means if I make say 40K at my W-2 job and have a lot of rentals which with depreciation (or say a Cost Segregation Study) show a loss of 50K I can take my taxable income down to $0 and then actually down to a -10K, but if those losses were 80K, I could only go down to -25K, and then the remaining 15K would have to be carried forward.

Thanks, Dan Dietz

@Eamonn McElroy I am actually at least 8 years away from quitting my regular job where I could it could be useful to me since I work at least 2000 hours in that job.

I thought it would be useful for other members here that might be wondering about that, since I can imagine when the time comes to slow down in my day job I will probably wonder the same thing.

I am seeing my tax man in a few weeks and that is on my list of questions for him, just to put in the back of my mind for future use also. 

What are the professionals thoughts on things like classes or seminars? Things like BPCON, specific classes on things like contract law, eviction procedures, etc....?

Thanks, Dan Dietz

I think you have the right idea. We (two partners and I) are thinking of doing the same things, and we also have our SOLO401Ks with @Dmitriy Fomichenko.

Can anyone chime is as to whether or not an 3 way LLC's 'buy sell agreement' that sets a price at a 'multiple of rental income' (example is 100 x monthly rental income = purchase price.... which happens to be VERY close to the tax assessed value) can be used for valuation purposes instead of a formal appraisal?

Thanks, Dan Dietz

The others make some good point about deciding whether or not to 'take the chance'.

I guess part of how I look at it is if you took time to research stocks or other investment, go online and make trades, and keep track of the corresponding paperwork. Would anyone questions if it is OK to spend that time picking and managing those 'traditional investment' in your IRA? I would say no. Why should it be different with real estate to perform essentially those same functions?

I am not a professional in this area by ANY means, but have studies it some for my own situation. 

I am wondering what you see as the 'benefit' of the TIC structure? To me, it seems like one of the few advantages of the TIC is more flexibility IF one of the members wants to sell their interest in the partnership AND do a 1031 Excahnge. I could very well be wrong on that.

I am involved in 5 different LLCs, 4 of which are for rental properties. We have 'buy-sell' detailed out in a lot of detail including; right of first refusal, how to calculate selling price, etc.... and 'survivors benefits' detailing if a member's heirs want to stay of or be cashed-out etc...

Is seems to me that the time the TIC helps on a member wanting out is in the case of a 1031 Exchange, which HAS to have a 'real property' sale, not an LLC sale, which is shares in a company, not actual real estate. Otherwise you can simply sell shares of the LLC from one member to another, or to an outside party.

One of the potential DOWN falls of the TIC is that the other members can NOT make a person sell or prevent them from selling to an undesired person.

With all that said I AM thinking of a possible future TIC partnership. The sole reason would be to bring on a Private Money Partner for down payments, who at some future point could sell that share of ACTUAL real estate to me when there is enough equity to cash them out and have then turn around invest in ANOTHER real property investment via 1031 Exchange using a TIC. That would NOT be possible with an LLC.

What those ^^^^  guys said. 1) Those looses are carried forward, you just are not seeing them now. 2) Once you have that cash flowing say 10K per year and you have 15K in depreciation for a 5K loss you CAN take that cash flow down to $0 with no taxes. 3) The funds you are putting in to fix it are part of the basis, meaning up front cost. 4) Find an afforable tax person, it will more than pay for itself in your situation. 5) Also consider that even if you are making 15%+ per year BEFORE the tax benefits, that is STILL a pretty good investment, IMHO.

I believe @Steven Hamilton II is in your neck of the woods, and he would definitely be on my list if I were looking for a new one judging from his knowledge he shares on here.

Dan Dietz

I am of the understanding that I can screen tenants, sign leases, decide what maintenance needs to be done etc... under NO circumstance can I 'get a paycheck' for that, as Brain explained above.

With that said, I DO see it as 'increased cash flow' since I do not have to pay a PM 10% of income - meaning if I were to hire a PM and had 10K of income come in, only 9K would go into my SDRIAs account. With eliminating that expense 10K goes in. Similar to using lower or no cost mutual funds to increase yields in a way.