All Forum Posts by: Michael H.

Thanks, Tchaka. I confirmed and you are correct about PenFed. For what it's worth, I'm hearing that Atlantic Coast Mortgage is in the process of offering HELOCs on investment properties in the near future.

Hi everyone, I'm seeing some posts from 2020 indicating that Pen Fed credit union will do HELOCs on rentals. Can anybody confirm is they are still offering this service in 2023? Looking for a quick answer if possible before I contact Pen Fed to inquire. Thank you so much!

Thanks a lot for the advice, Doug!

So I was watching a presentation by Kevane Grant Thornton last night on Act 20. My understanding is that Act 20 has recently been amended by the law makers to eliminate the 5 employee requirement to attract more small businesses, as opposed to just these big hedge funds lol. This seems very very attractive... considering you don't have to be a bona-fide resident of PR (like you do with Act 22).

My question is - is there anybody here on BP right now that owns real estate rental properties in the US mainland, that has been approved by the Commonwealth of PR to operate as an Act 20 business on the island?

Act 20 requires that you "export" a service to the mainland, so let's say you own rental properties in the states, and you're "exporting" rental space to the US.

There's a laundry list of services that are "eligible" under Act 20, however, there's nothing explicitly written regarding real estate investment properties.

******Here's the most interesting point I've read: "Any other service that the Secretary of Economic Development and Commerce determines, after consulting with the Secretary of the Treasury, that should qualify as an eligible export service, based on factors such as jobs to be created, payroll generated and proposed investment in Puerto Rico."

Seems like you'd likely have to have a large real estate operation going on to get approved, as opposed to a little guy starting from the ground up (me).

It sort of seems to good to be true for any/every real estate investor from the mainland to set up an LLC in PR, and get taxed 4% on rental income, while eliminating US federal personal income taxes for your real estate business.

Anybody on BP actually living in PR right now that may have some advice?

Thanks,

Michael

Thanks @ Zach Shepard!

Hi folks, I'm purchasing a condo in San Juan, PR as my Primary Residence, so obviously the bank and the IRS expect me to live in that condo for "the majority of the year." I thought the IRS would be more specific by saying something like, at least half of 365 days, or provide more details under varying circumstances (as I'll explain, below). This is the heading of a NY Times article: "Defining your Principal Residence for 'Tax Purposes' isn't always simple." Why?

I'd basically like to spend at least over 6 months in my primary residence in Puerto Rico, and then the rest of the year in the states  (rent or stay w/ relatives). Does this situation seem fine for tax/loan purposes?

Here's my scenario - Let's stay I start making payments on the loan starting in September of 2017.  The last day of the calendar year is December 31st, 2017. So within this time period, would my obligation be to live in this condo for at least more than half of the time period between September and December 31st of 2017?

Ideally, I want to live in this condo for the minimum amount of time required for me to satisfy the "Primary Residence" requirement, and the rest of the time, air bnb the unit out.

I'm trying to avoid any potential issues with the bank and the IRS.

Anybody here have some helpful insight?

Thanks! - Michael