All Forum Posts by: Sastry Srini

 The purchases price was $165k 

I spent on the closing date for $47k 

I spent for improvement, mortgage and etc around $60k until now

Additional spend roughly $30k and not sure about the building inspection.

I'm not sure about the foundation of this house if the building inspection what else needs to be fix

I'll hire the inspector to inspect the house and let the contractor estimate the cost and see what decision I should make.

Thank you so much for your advice. It's very helpful

Hi everyone!

I'm Summer (Newbie for real estate) 

My stupidity was I 100% trusted the realtor when he said the house (duplex) is a good and I don't need an inspector and I did believed him. Then I sign everything and took this deal with no inspection. Later I got the violation letter , a long list of what needs to be fixed which was a lot. I have done changed the HVAC for both unit, brand new and for HVAC the inspection was already passed. and I changed all windows for both unit. also I changed the new electric panels and changed all outlets for both unit but the inspection said I needs to run all electric the whole house which means I have to pay more for run the electric and replace all drywalls, that means I have to put lots more money into it.

the question is should I go further or should I cut loss? It's very tough decision for me.

- If I should cut loss. I got offered $120,000 with no inspection now

  but  I already spent $107,900 and I have mortgage balance $119,000 that I have to close 

  which means I'm going to lose around $115,000

- if I should go further 

  I have to pay more for run all electric $15,000

  Replace all drywalls $3,000 

  Plumbling $3,500

  and after I got all these done. I have to do the building inspection which I'm not sure how much more that I have to put the money into? Any Idea about the foundation?

  If I can make it done. the rent around that area for 2 units will be $1,700 monthly 

Option 1 = Cut and loss around $115,000        (which is so painful T_T)

Option 2 = Put more money $30,000 or more and get a rent $1,700 a monthly 

Please help me with my stupidity. Please give me advice. I would like to get away from this nightmare.

Thank you so much for your help

Hi BiggerPocket Family,

Wanted to seek advise on buying the investment property in tracy hills

Detail

1. Single family home from Lennar

2. 680-750K cost

3. 1800-2000 sq ft area

Question:

1. wanted to see the general thoughts on the growth of the area.

2. does it have good rental yield, market overall ?

3. is it even good decision from appreciate and overall cashflow perspective. even if it breakeven for first 3-4 years.

I am about to purchase a property in Miami Beach to do STR, and I'm so excited to start my Airbnb business venture. However, it seems like there are so many rules and regulations with the State/City and when it comes to getting approved to list on Airbnb. Is there anyway to bypass any of the requirements? One of the requirement that is the most challenging to obtain is a letter from the HOA saying that STR (less than 180 days) is allowed. Can we provide other documents in its place if the HOA doesn't provide?

I took a look at the Miami STR zoning map from the Airbnb website and saw that the property that I'm about to purchase is in a zone that as "Short Term Rentals Allowed in accordance with all applicable State, County, and Local regulations." With this said, I'm taking it as it's not prohibited at least. There is a lot of paperwork and certificates to obtain, but they require the letter from the HOA.

I was browsing Miami on Airbnb, and it just seems like so many people are able to do Airbnb in Miami. Some places look like they are in really nice high-rise buildings with probably really strict rental/leasing terms from the HOA. So I'm wondering how are these people able to get on the Airbnb platforms to list their properties with the strict paperwork requirement. What is the loophole here?

I'm close to closing on the property, but now I am wondering if this is a good idea to move forward if I can't even get to list on Airbnb so really do need some help to make a decision.

Thank you so much!

Thanks for that shout out @Bill B..  @Sastry Srini, As @Brandon Bruckman said, your depreciation follows you.  The only change to your property basis would be if you purchased more property than you sold.  That would add depreciatble basis.  And would result in less net profit if you then sold after a year or so.

When you buy the three replacements the basis of the old property is divided between the three purchases.  It's usually a ratio of size of purchase or size of property.  Something that can be consistent.  So if you later sell one or two of those properties you will only ba paying part of the deferred tax from the 1031.  Is that a good idea?  Well, it's a better idea than paying all the tax for sure.  And it does let you manage your tax bill better.

@Dylan Johnson, is correct that there is no statutory holding period.  However, far more folks are comfortable with any hold for more than a year.  There was even a mantra in our industry for a long time - "one year and one day".  The only magic is that in that situation no matter when you purchased the property you owned it across two calendar years.  And you reported it on two consecutive tax returns.  Thus satisfying a couple court rulings saying "two tax years" and "two calendar years".   The statutory standard truly is your intent to hold for productive use.  And how you can demonstrate your intent. 

In the event you are anticipating (the 1031 and then the later sale of one of the assets).  What you'd be most concerned with is holding the property long enough to qualify for long-term capital gains treatment.  Usually, in a 1031 exchange, the holding periods are tacked together.  So you would be well within the LT cap gains window.