All Forum Posts by: Rashid Khalil

Ok, so I am kinda biased on the Bootcamp. I was the moderator for the STR Bootcamp forum. I thought it was really great personally.

I will say that having a couple hundred people in the Q&A brings up a wide variety of questions, some which you might not have even thought to ask.

Plus everyone joins an accountability group which keeps you on track and helps you interact with other Bootcamp participants.

I think it is a good system with people that know the most about STRs on this board. @Avery Carl literally wrote the book on this subject. Along with @Luke Carl and @julie mccoy. It is worthwhile IMHO.

I agree with @John Underwood. There is just too much great info here that those kinds of courses are pretty much moot at this point. 

In my previous post, I talked about the different property classifications to help separate real property from personal property. Identifying your personal property helps you determine the portion of your building that can be expensed immediately under the first year 100% bonus depreciation deduction. I thought it might be helpful to walk through an example.

An investor buys a building for $5,000,000. The value of the land that the building is on is $400,000. Since land does not depreciate, the amount that is subject to depreciation is $4,600,000. Traditionally, the investor would expense the $4,600,000 straight-lined over 39 years. The investor decides to get a cost segregation study to determine the amount of property that is classified as tangible personal property. The results of the study show that $1,000,000 is related to tangible assets, including parking, specialty electrical, finishes, flooring, interior landscaping, etc.

Under the bonus depreciation rules, the investor is able to expense the $1,000,000 of tangible assets immediately. The results of the cost segregation study are considered significant. The study's report also allows the investor to retire and expense structural assets as they are exhausted, which can also lower capital gains when selling the property.

Are you familiar with bonus depreciation?

@Cirilo Villar only if you move to Texas or where ever you buy. FHA is for owner occupied. If you don't move then you can be prosecuted for mortgage fraud and could get accommodations at the nearest fed pen for up to 30 years and you have to pay for it also with a fine of up to $1,000,000.00.

I want also make a point. IRS will likely to be on your return if you have a large W-2 but with rental (STR) to offset a big part of it. I would suggest to be very careful and perfect your documentation on everything. I know there are CPAs out there selling this "strategy", all I want to remind my fellow here is that, be cautious how you handle it. I have been in tax for 17 years, once IRS on you, they normally stay watching for at least 3 years. Good luck!

I am in the same situation. However, with how the market is going and the expected not-so-great economic condition, taking the risk in STR in attempt to save taxes can be damaging. I am a CPA specialize in taxation. I won't do it in this economic condition unless you are fully confident that STR you are acquiring is going to be an income producing property. It is not worth it to loss the real cash to save tax. I haven't found one STR that give me that confidence yet.