All Forum Posts by: Jeff Cantrell

Considering a couple of the summer boot camp courses to expand my knowledge. Creative finance and Multi-family.

Who’s had any experience with them or the instructors?

Thoughts?

Following.

@Brian Walters

I don’t have a real clear answer for that Brian.

I suppose I would if I found/create the right deal, but I haven’t found anything as of late.

Some of it is personal comfort level. We’ve built up relatively slowly and learned along the way and we’ve now gotten to a level where we’d be more comfortable taking on a bigger risk, so it’s really about making the right deal.

We just bought an additional 5 SFH last month but didn't need the cash. We missed out on a bigger deal earlier in the year, that would have required some leverage, because we couldn't come together on terms with the seller.

I’m patient and the right deals will come along in time.

@Bill Brandt

I don’t disagree with anything you’ve said.

Realestate has always been a secondary business (investment vehicle) for me and always cash purchases, which is what my original question pertains to. I should have been more clear.

Is there any way, without taking on debt and more properties (not that doing so is a bad thing) to avoid taxes? The only methods I can seem to find is opportunity zones.

And again, I am not opposed to using leverage, it’s just not what I’m asking about. If the right, large deal were to come along, I would consider leveraging our portfolio to make it happen.

Also, like you, a large portion of our net worth has been from appreciation, even while making really great ROIs.

Appreciate your input.

@Bill Brandt

Thank you for the well thought out response.

Your numbers:

20% down 4% interest in 30 year $160k loan is $765 of which approximately $535/mo ($6420/year) is interest. Insurance is say $750/year and property taxes are $2,000/year.

;you get $1250/mo rent ($15k/year)

With those numbers, that’s only around 6.25% return, so it would be easy to make that a loss. In my area, the numbers would look more like:

200k property

160k loan

$1400 property tax

$2000/month rent ($19,200 assuming 20% expenses)

So, a 9.6% return (reasonable but still not great)

$19,200 (estimated income after expenses of 20%)

-6420

=$12,780

-7272.00 depreciation

=$5508 profit.

No way around that is there?

Also, now look at it with no mortgage. Now you’re at a profit of $11,928.

So if your buying cash, are there any provisions in tax law to not pay on the entire income? Because people like to make it sound that way, but can never give an example or explanation.

@Tom S.

Here’s an example of one of mine:

$70k invested

NOI $12k/yr

Depreciation is only $2500

Still paying tax on $9500 in income right?

@Joseph Romano

First look at it from a financial standpoint. Run the numbers and see what makes sense.

They’re obviously not going to pay you for the entire house when you are using part of it yourself. Make them a price that’s fair to you and them. Have a clear cut contract. Treat them well and watch them build wealth for you.

@Ryan Wesley yeah, I’d love to hear how to make that happen. Legally.

I’d love to offset or avoid paying any unnecessary taxes but I’ve yet to hear a method of doing so (if you’re actually making money).

I’ve been in realestate investing for over 10 years. I continually hear people talk about “paying no taxes” being a benefit to owning realestate, but I’ve yet to have heard a single explanation of how that’s possible if you’re making a profit. Properties have no mortgages and all have great returns.

Someone please, let’s hear a comprehensive explanation of how you make a profit and don’t pay any tax.

Last week I purchased a group of properties. Today, I received an offer on a property I've had for sale for some time. I would be willing to make some concession on the price if I could do a Reverse 1031 and allocate the proceeds from the sale back against the purchase that I made last week. Here's what I think may be the catch; the properties are in my name already and as I understand, they must be put into a LLC or some type of entity that holds them until the sale is complete.

Am I out of luck this time?