All Forum Posts by: Will F.

I am somewhat familiar with that area. 181K per door is steep. The only reason that little Haiti is rising in value is because everything else has appreciated ten fold. I would have someone drive by the area of your possible investment at different times after dark and on weekends to see what is going down. I would not be surprise to see street walkers and drug dealing. The area is definitely getting better but not sure its there yet. Also check the crime stats. There could be areas of Little Hiati that have become gentrified and are good investment. But you drive through a rough patch when you get off I-95 exit. 

@Nathan Fesnak If you aren't already familiar with Cape Coral - be aware of the tax assessments that are coming in waves. Many lots and properties have already been assessed and the rest of the Cape the assessments will be coming the next few years. If you find some cheap lots do your due diligence. I was looking at building a spec home 3/2 on a piece of land south of the Caloosahatchee River a block off the river, but have paused that route at the moment for another deal. I did interview quite a few builders though and many of them are custom builders so unless you are GC and going to overview the construction - or partner with a builder - it may not provide great margins.

Additionally, we've had a very very heavy rainy season this year and while Harvey was hitting Texas we had our own storm front down here and there was sporadic flooding. Based on another hurricane brewing already in the Atlantic and how these cycles tend to happen every 10-15 years - I wouldn't be surprised if the next few years brought us more tropical storms/hurricanes so be cognizant of weather effects. Certain parts of the Cape may be more prone to flooding. 

its definitely going through gentrification, I live near by in the edgewater neighborhood. I wouldn't mind checking it out for you I want to make sure you are paying a good or fair price. 180 seems a little steep but as we know it depends on size/rents

 I think the confusion many people have is that from a lending perspective anything over 4 units is considered commercial, but that is not the case when it comes to depreciation. All residential dwellings including multifamily (even 300 units building etc.) are all considered residential and depreciate over 27.5 year period, even though from a lending perspective it's considered commercial.

@David Lao

In broad strokes... and you had written in your OP that it was residential only.  Otherwise, commercial (which is 5 or more living units) is depreciated on a 39yr basis).

Don't forget, unless you 1031 you'll be paying all that back with depreciation unrecapture when you sell.

@Will F. as we discussed in another thread, only if you are a real estate professional. If not, unfortunately you cant use the depreciation to offset the capital gain from other assets.

It steps down every year 20% but still regular depreciation is more than enough for most people. 

A lot of syndicators are using it as a marketing scarcity tactic. 

 As @Andrew Hogan mentioned above, the extra passive losses from cost seg are limited to offset passive income (rental income) and passive gain (capital gain from real estate). The only way you can use those losses against active W2 income or gain from crypto/stocks etc. is if you or your spouse have real estate professional status (REPS).

So, in short, it works best for those who have REPS.