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All Forum Posts by: Justin B.

Justin B. has started 19 posts and replied 651 times.

Post: Vacation home VS rental property

Justin B.Posted
  • Investor
  • Gaithersburg, MD
  • Posts 659
  • Votes 441

Who is "they" and what "rules"? Once someone sells you the property it is yours to do with what you wish (assuming the title in in your name). Just like the bank can't tell you what you can and can't put on your property (as long as you pay your note and it's not illegal), neither can the previous owner who is doing financing. Unless they write into the provision of the loan they have some control (and if they want to do that, turn around and run), you can do whatever you want.

Depending on if and how much you rent it, determines a whole bunch of tax situations and you should consult your CPA on that.

Post: Is your primary house an investment?

Justin B.Posted
  • Investor
  • Gaithersburg, MD
  • Posts 659
  • Votes 441

So here is the bottom line after reading all these posts:
Yes, it is an "investment"
No, it's not an "Asset" in terms of it generating you cash flow (putting money in your pocket monthly (monthly being the key word).
Yes, it is an "Asset" in the eyes of accounting principles and the IRS.

How's that for a short answer? :)

Post: New from Washington, D.C./Northern Virginia

Justin B.Posted
  • Investor
  • Gaithersburg, MD
  • Posts 659
  • Votes 441

Welcome. I'm in Gaithersburg, MD myself

Post: Best Tax Preparation Software

Justin B.Posted
  • Investor
  • Gaithersburg, MD
  • Posts 659
  • Votes 441

TurboTax works well for me, but I have pretty good knowledge of what I'm expecting to see (numbers wise) and sometimes TurboTax spits out a wrong end number (like for depreciation) that I know is not right. It's not TurboTax's fault most times, it's usually something I entered wrong on a previous screen (fat fingered). Also it doesn't ask about EVERY possible deduction so it pays to be knowledgeable enough to go "Hey, how come it didn't ask me about this or that" Any software is only as good as what you input so always check for mis-types, wrong key hits, deductions it didn't ask about, etc. Make sure all the final numbers match your records and are what you expect them to be and you'll be fine. If you can't do that, you really need a tax professional to do them for you. It's worth the extra cost if your knowledge isn't up to par.

Post: Buying real estate to offset other businesses

Justin B.Posted
  • Investor
  • Gaithersburg, MD
  • Posts 659
  • Votes 441

Just be careful and consult your CPA on tax advice. Real Estate Losses cannot offset all income (and usually doesn't offset any earned income at your level unless you are a real estate professional). The IRS defines what a real estate professional is so go look it up. There are of course other situations and loopholes but at your level, you need to involve a CPA here as even some of the loopholes I know of fade out after a certain amount of income (way below the level your at as a Doctor).

Post: Bill Barnett Fear Fighter Program

Justin B.Posted
  • Investor
  • Gaithersburg, MD
  • Posts 659
  • Votes 441

No one and I mean no one needs to spend $30k (much less $50k) to be able to make it in real estate. I've spent maybe $1,000 over the course of 7 years on books and other small hit items (never any guru type stuff). It's probably 90-95% books to be honest. I've got 5 SFR's and $1,400/month cash flow. If someone needs to spend that kind of money to get into real estate, real estate is not for them!

Post: Is your primary house an investment?

Justin B.Posted
  • Investor
  • Gaithersburg, MD
  • Posts 659
  • Votes 441

I think everyone on here is confusing the question. He asked if your primary home is an "investment". The opposite of "investment" is not "liability". If you buy a rock for $5 and hope to sell it for $10 a year later because it appreciated, it's still an "investment". A stupid one, but it's still an investment :). Your primary home can absolutely be an investment. You may never realize a gain or you may realize it 30 years down the road when you sell it, but if you are buying it and you hope you can sell it for more than you paid for it later (which is 99.9% of people who buy homes), it's an investment (by it's very definition).

The argument for whether something is an asset depends on context. For me personally, a negatively cash flowing property (primary home or not) is a liability, but if you ask the IRS, any property is an asset and the note on it is your liability. So in specific terms, anything you own (whether it cash flows or not) is an "asset" in the eyes of the IRS and general accounting practices (your car too for example). If you don't believe me, try and keep your books and put any piece of property in the liability column. You'll be laughed at. So when Robert Kiyosaki says your home is not an asset, he's not giving accounting advice, he's giving real world advice so you don't think about what you own in the wrong state of mind.

To sum up, I don't consider anything that doesn't positively cash flow for me an "asset", but whether it cash flows are not, when I do my books and taxes, it's an "asset" :) Confusing yes, but it makes sense when you think about it :)

Post: New Member in MD

Justin B.Posted
  • Investor
  • Gaithersburg, MD
  • Posts 659
  • Votes 441

Welcome, I'm local to the area too. Over in Montgomery County.

Post: Contemplating 2nd Investment property in less than 2months

Justin B.Posted
  • Investor
  • Gaithersburg, MD
  • Posts 659
  • Votes 441
Originally posted by @Ian Harris:
Purchased 1st investment property last month for $89K, appraised for $119K. Should have it rented for $850 by the 1st of Jan and the mortgage is only $564 ($286 passive income/month).

You might want to recheck your numbers. What about insurance, property taxes, are you responsible for anything like trash?, and what about a misc allowance? (I usually use $50/month on properties this size). I think you'll find over the course of the year you won't be close to the number you though you were going to be. I only mention this because I don't want you to base returns on false numbers. While you may still positively cash flow on this house, I think you will find it closer to $100/month than $286.

Post: single family home vs multi unit property

Justin B.Posted
  • Investor
  • Gaithersburg, MD
  • Posts 659
  • Votes 441

Wow that was really hard to read without punctuation..... :)