All Forum Posts by: Eric Chase

Why pay cash? Have you thought of financing 4-5 cash-flowing properties instead of paying off one?

@Glenna Wood, thanks for the thoughts! I am selling to free up cash for private lending. But thank you for taking the time to give me something to consider!

Thanks for the thoughts! @Eamonn McElroy, your option #1 is the one I have been considering. Do you see a problem with waiting until after I file my 2020 return when I’d know for sure what my AGI is, or do I have to pull it within the tax year? I’d need to pull money from my private placement, so I’ll want to know precisely my AGI to know for certain how much of my 2020 contribution I’d need to pull. Does that thought process make sense?

I need to get a tax advisor!!

BP Community, can you provide advice???

I contributed the max ($6,000) to my SD Roth IRA in May, knowing my (combined with my wife's) AGI for 2020 would be under the $196K threshold. I then lent out this $6,000 along with my entire IRA balance to a fund with compounding interest. Today, due to my tenants getting unexpected military orders, I've learned that I need to sell a rental property several months earlier than expected. My intent was to sell this property anyway, but with a closing after 1 Jan 2020. Now, the sale will close this year and I expect a significant capital gain that will put my 2020 AGI over $206K. Thus, I will not be eligible to contribute to a Roth IRA at all this year.

What’s the best way to get myself right with the IRS when I file next year?

Hi @Jessica Boatwright! I definitely agree with @Kevin Leahy with respect to keyword alerts. One that I put in was “Peace Corps.” ;-) Welcome home. Happy to help, and feel free to hit me up anytime.

Eric

RPCV, Kenya

2005-2007

@Kim Tucker

Unless something has changed recently, they use third-party management: Voepel.

@John McGonigal, thanks for thinking about this and providing thoughts. I was just talking with my wife about this very thing last night at dinner. What we've come up with so far is that since property taxes will always be a percentage of the property's assessed value, it doesn't seem like it would matter where we are in the cycle: the more the property is worth, the more we will pay. And if values decline, we are still paying a mind-boggling 2.6-2.8 percent...  I will likely sell but can always be persuaded with a good argument!

@James Call

Great points, Sir James! Thanks for taking the time to reach out with such a thoughtful response. A part of me wants to stay in SATX just for diversification purposes since growth is so high (and I'm still making money), while purchasing additional properties in other markets and just not buying anything else in SATX. 

@Mike Castellow

@Tiffany Perry

@Jeff C., fair point. Rents are at market rate but could be raised slightly after current leases expire. One of the properties is leveraged and roughly breaks even. The other is free and clear, and brings me about $17.5K per year before expenses. Knowing these properties each bring in around $1400-$1500 per month means even if they were both free and clear I'd be into April of each year before I could break even from property taxes alone. It seems I could get a far better return in numerous other markets, but I want to keep getting others' thoughts before I make any moves.

A good counter-argument to selling is SATX's explosive growth, which certainly gives me pause. Since 2010, both zip codes I'm in are experiencing double-digit growth rates (16% and 26%).

@John M.

USAF moving me back to SATX next month. We should connect.