All Forum Posts by: Nathan Yarnell
Nathan Yarnell has started 4 posts and replied 45 times.
Post: Agent said not to worry about cash flow and consider tax benef
- Rental Property Investor
- Lenexa, KS
- Posts 45
- Votes 47
Originally posted by @Brandon Scott Jordan:
I agree with what Chris said above. The agent isn't 100% wrong necessarily, but there is so much to consider when tax planning. There are rare occasions where buying for cash flow isn't the main objective. But typically these situations are with VERY high active income earners who are being directed by experienced financial/estate/tax planners.
Unless that agent is qualified in tax & estate planning and he/she knows the details of your individual situation, I would be very leery of their advice.
On another note, best of luck with your first investment. It's really exciting to get started!
Thanks Brandon I appreciate the info and the good luck!
Post: Agent said not to worry about cash flow and consider tax benef
- Rental Property Investor
- Lenexa, KS
- Posts 45
- Votes 47
Originally posted by @George W.:
I Wouldn't necessarily fire the agent and burn bridges but I would definitely not buy a property that you know is gonna lose money.
The justification that its a tax write off is poor advice.
Thanks for your input George!
Post: Agent said not to worry about cash flow and consider tax benef
- Rental Property Investor
- Lenexa, KS
- Posts 45
- Votes 47
Originally posted by @Chris London:
@Nathan Yarnell
In God we trust. All others must bring data.
Here are your tax benefits, make sure you understand these as a dollar value and not just a quote from your agent.
1) Mortgage Interest: pretty easy to figure. In most cases, you are offsetting your rental income.
2) Depreciation: spread usually over 27.5 years.
3) Property taxes: the average in your home state of Kansas is 1.37%
4) Repairs: sounds great but you still have to pay for the repairs.
5) Other: milage is a good one. Advertising doesn't usually add up to much. Insurance, utilities if you pay them. uncollected rent (hope that doesn't happen) and probably a few others.
Thanks Chris! Tons of information here! Very helpful!
Post: Agent said not to worry about cash flow and consider tax benef
- Rental Property Investor
- Lenexa, KS
- Posts 45
- Votes 47
Originally posted by @Michael E.:
You didn't say how much you were calculating the expenses at (5%, 7%, etc.) but it sounds like your close enough to make it cash flow if you can control/lower the expenses. Also, you didn't say whether you're using current rent or market rate. Is there any chance you could raise the rents to make it cash flow? Or a combo of both?
I considered all of that Michael, and those are options, although the rents are very comparable. And obviously if I could secure the properties at a lower price..It was more of a question on the mindset of the realtor I guess more than anything, and if the tax benefits are that big of a trade off.
Post: Agent said not to worry about cash flow and consider tax benef
- Rental Property Investor
- Lenexa, KS
- Posts 45
- Votes 47
Originally posted by @Bruce Woodruff:
Ahaha, she's an agent. She makes money if you buy the property, she makes nothing if you don't. This is kind of easy to see through, is it not?
PS - This is not representative of all RE agents.
I mean that’s the answer that was staring me in the face, just wanted to throw it out here and see if I was missing something, appreciate the input!
Post: Agent said not to worry about cash flow and consider tax benef
- Rental Property Investor
- Lenexa, KS
- Posts 45
- Votes 47
Originally posted by @Steven Foster Wilson:
Originally posted by @Nathan Yarnell:
So I recently was sent 2 possible duplexes to purchase from an agent I trust. I ran the numbers using the basis Brandon lined out, and the properties comes out to a negative monthly cash flow by about $175 per property . I told the agent I had to pass, and gave her the reasons why. I got a follow up email that was considerate and agreed with my assessment but also stating that people get to caught up on “monthly cash flow, and should consider the yearly tax benefits.” Being that this would be my first investment, am I being too picky? I’m not looking for a crazy cash flow, $150/$200 a door, I just don’t want to be negative. Thanks for any input!
reread Kyosaki's cashflow quadrant. He quotes that losers listen to people who say " buy it for the tax benefits" It must cashflow. Even if its not alot.
Thanks for the input! It’s on the list of books for this year!
Post: Agent said not to worry about cash flow and consider tax benef
- Rental Property Investor
- Lenexa, KS
- Posts 45
- Votes 47
So I recently was sent 2 possible duplexes to purchase from an agent I trust. I ran the numbers using the basis Brandon lined out, and the properties comes out to a negative monthly cash flow by about $175 per property . I told the agent I had to pass, and gave her the reasons why. I got a follow up email that was considerate and agreed with my assessment but also stating that people get to caught up on “monthly cash flow, and should consider the yearly tax benefits.” Being that this would be my first investment, am I being too picky? I’m not looking for a crazy cash flow, $150/$200 a door, I just don’t want to be negative. Thanks for any input!
Post: Do you charge your tennants for lawn care?
- Rental Property Investor
- Lenexa, KS
- Posts 45
- Votes 47
@Nathan G. Thanks for your help! Great info!
Post: Do you charge your tennants for lawn care?
- Rental Property Investor
- Lenexa, KS
- Posts 45
- Votes 47
@Laura Williams Great info thanks for your help!
Post: Do you charge your tennants for lawn care?
- Rental Property Investor
- Lenexa, KS
- Posts 45
- Votes 47
@Corey Hawkinson That makes sense, I suppose you add that cost into your evaluation of a multi-family property from the start. How much of a cost per month is that if you don’t mind me asking?