All Forum Posts by: Gary Michalske

I hear Scott Abernathy is a good one.  rentfromscott.com

Hi Adam,

I live and invest in Murfreesboro, TN and I've only been attempting to seriously invest in Real Estate since earlier this year. I have three deals going on in the Nashville area with another investor where I am the capital partner only. I should complete a flip I've been doing in Gatlinburg TN this month. I've completed three flips on properties in TX as a capital partner with two other investors. The only property I've secured in Murfreesboro this year will sell this month and it's a 3/2 SFH. Although my experience this year has been flips and new builds, my primary goal is to buy and hold. Finding a good candidate for a rental in the 'boro is tough and very difficult to even get close to the 1% rule; forget about 2 %. If a great deal does surface it's gone in a few hours. One can much closer to 1% if purchasing properties in the older, less appealing area of town. Different areas in Murfreesboro demand different rents as is common in most cities. As you mentioned in your post, you've found several SFH's between $150-$180. In this town, you'd only be able to rent them for around $1,000 - $1,200/month, again, depending on which area in town. I'm not saying you couldn't get more per month, but I think opportunities for higher rent would be far and few between.

I know my words don't sound very assuring to you but I don't let it stop me.  I just try much harder to find properties closer to $100K or less.

One highly recommended property manager is Scott Abernathy.  You can find his info researching rentfromscott.com.  Of course I haven't had an opportunity to use him yet but I do know one local investor who does.  He came highly recommended from him.

Thanks for the explanation @Ben Raygor.  I think I'll take your advice on raising the selling price to recoup the SE tax.

Hey there BP Tax experts,

I have a question regarding taxable income from property sales. I have a CPA that does my taxes but I’m not convinced he’s an expert on the real estate side of things. And furthermore, if I call him to discuss options or just to explain things he charges me $75 and that kind of bothers me. Hint...hint....

Here’s my current transaction scenario. I’m kind of doing a favor for my real estate agent’s mother. She is going to purchase a house from me after I purchase it from the seller. I’m only looking to make $2,000 for my efforts.

Purchase price: $130,500

Repairs: $7,400 (I pay for the repairs)

Selling Price: $139,900

My Profit: $2,000

The purchase closes on 7/28 and the sale will close on 8/17.

My question is what will be the basis of my taxable income on this? I work a full-time W2 job and have a LLC on the side with which I use for business transactions as described here. My thinking is the $2K will be considered regular income taxed at the tax bracket rate defined by my W2 job. I don't think I will be charged capital gain tax or self-employment tax.

I know the profit is a very small amount but the example would apply to larger transactions too. Will someone let me know if my assumptions are correct please?

Hi Tony,

Have you tried Franklin Synergy Bank?  They're a commercial portfolio lender.  My borrowing power is currently maxed out due to three construction loans I have with them but they told me if I found an income-producing property and I came up with the down payment they would cash out refinance for me in a heart beat.  Their interest rates seem very reasonable too.

@Tony Crabtree The meeting in Murfreesboro starts at 10 AM and lasts until 12 PM.  If you google TNREIA you'll find a calendar there with all the information.

@Dennis L Lewis Jr No, I am not a member REIN yet but I plan to be soon.

You can visit the TNREIA meeting the 3rd Thursday or each month at XMSolutions on  Robert Rose Drive.  I attend every meeting and learn and share quite a bit there.  I don't believe there's a charge to attend.

Any of the following will do just fine but only if the price is right:

Brick 3-2 SFH

Duplex

Triplex

Quad or larger

Welcome...please add me to your list as well.  I live in the 'boro and am looking for flips at the moment to raise capital.  But buy and holds are my long term strategy.

I went back and checked with the Tax Attorney who set up the Solo 401K for me. My plan documents are up to date and are maintained.  There actually is an annual fee ($199) but the original set up fee (from my attorney) covered the first year or maintenance for plan provider to keep it up to date.  I was confused because I haven't seen an annual charge yet since I set the account up in 2014.  So the original fee ($2,000) covered the 2015 annual fee.  I didn't get an invoice for the 2016 annual fee because the tax attorney overlooked it.  He's not going ask me for it but he did say I'd get an invoice for 2017 next month.  According to him, some setup companies charge an annual fee on top of the one the plan provider charges.   So if the plan provider (the one that maintains the plan documents) charges the setup company $199/yr to maintain the documents, the setup company would charge the client an annual fee on top of that.  My attorney only charged me once at the onset.  After that, I reimburse him for plan providers annual invoice without any markup.  I'ts also free for me to call him with any questions I may have regarding related tax or legal concerns.