All Forum Posts by: Sastry Srini

Folks, I have a question about a scenario. 

Bought SFR at $235k (Depreciation base: $200k) in 2016. The property depreciated for 7 years

Loan on property: 200k ;   Current market price: $360k

If I do 1031 exchange on this property to 3 SFR (each valued ~ $120k and still meeting 1031 rules ) for better cashflow and appreciation. I want to sell 2 of SFR after a year. how would the depreciation base be calculated?

is it a good approach to unlock equity? please comment on this approach.  

Thanks in advance .   

@Monil Shah 

Just to be clear, if you are on W-2 income, 401k is way to reduce your taxable income to save for retirement. The IRS allows you to borrow up to 50% of your vested 401(k) retirement savings, with a $50,000 cap.

The rental income is considered passive and can only be offset by passive losses. 

It is a good idea to consult a tax planner to see what fits your situation. 

If you have a self-directed IRA funds, that can be used for investing in real estate. I don't have full details of it. Hope this helps. All the best

I think you should give it try. I co-own a STR in St.Augustine,FL which is managed by Vacasa ( last year it was managed by a local PM, Vacasa bought them out 6 months back). So far, it has been a good experience. As long as you can keep tabs on things, you should give it a try as it is in good location ( 5 minutes from Disney). Best of luck.

 due to smaller backyard  limitation.. other alternative is  "Hot Tub/Spa" + some backyard games. I can understand why pool adds value.. open to other suggestions

is is not the lender has their own Appraiser, who is supposed to provide an  independent opinion?  I wonder, how as a borrower can chose an appraiser?  Choosing your own appraiser can bias the valuation.. Hope your lender is  ok with it..

Looking for input from the group. Own a STR in St. Augustine in Davis Shores -close to downtown. Which gives a better ROI for the investment.

Putt-Putt Golf is  relatively cheaper from installation and maintenance perspective.  Any thoughts/suggestions which is preferred .

Thanks in advance.   

You have 2 options

1. Work with your partner and agree on a fair % .  Pros: Can be beneficial to both, if you can agree and work together.  Cons: trust issues which can lead to discontentment, if you don't see eye-to-eye.

2. Easier , but slightly expensive option - hire a 3rd party STR PM.

I would lean to 2nd option, that is peace of mind. 

@Mary Beth Blackwell the estimator is simple to use and calculates per month .  The model is very simplistic and does not take the seasonality into effect. 

Huge variability can happen in "Other expenses " and "property management expenses" as it directly depends on how many times the STR got rented out. The other variables the model may want to include another view from ROI perspective of initial investment. If the model can account for them, it can be developed as a useful tool.

An initial criteria ( general thumb rule) that if STR can generate 20% above the annual expense ( debt service + taxes+ insurance etc), STR may be further considered for further evaluation. if not, move on to next one.

Thanks! 

Yes.. count me in. Have a str and looking to learn self manage. Thanks