All Forum Posts by: Alex W

What exactly is your goal? Is the tax write off what you're after? Why not just rent space to your LLC as an office? This way you have income coming in from rents paid by your LLC to you. You can then deduct the expenses (% of usage) through your LLC. Kitchen (break room), hallways (common areas), etc.

It would be different if the property was owned by your business and do a sales-leaseback to generate capital.

You need to consult with a CPA regarding this.

Oops I meant Jim4sparks!

You just shot yourself in the foot here, Jim.

Mike is spot on! I too come across deals by interacting with people on a regular basis.

I was at a jewelry store the other day looking at watches and the sales lady asked me what I do for a living. I told her I was an RE investor. She immediately opened up about her home and that she is in pre-foreclosure. They were having a hard time paying for their mortgage and is looking for a way out. They have some equity in their property and I will see if we can make this a win-win for both of us.

I don't knock on doors either. I hate that. I just interact with people and let them know what I do. Once people see you are an honest person that can solve problems, deals come to you. It's the same thing with any business. Your reputation goes a long way.

There are a few places but I would be crazy to disclose that! :D

I disagree because even though appreciation is slow, you build equity by paying down the principal on your mortgage. This still builds wealth in the long term.

It's nice to see so many different points of view. As I mentioned in my previous posts, I would like to emphasize to all the newbies to focus on investing in cash flowing properties to build your base. Once you have a solid base or hit critical mass, you can then invest for appreciation to build up cash faster since you have money coming in to sustain those appreciation plays. This way you avoid shelling money out of your own pocket to hold on to non cash flowing properties. As mentioned above you can do a 1031 exchange and pay your next purchase outright or bank roll your gains into a bigger property. It's basically a free loan from the government.

Cash flow allows you to play the appreciation game...investng in appreciation still needs cash flow (any source) to keep you in the appreciation game.

Well I'm glad this topic advanced to a more educated discussion. Thanks to Mike, Vincent and Steve for chiming in.

I hope the newbies and "investors" out there learn from this.

Cash flow IS king!

Vincent,

Your friend is making 24% on his $1.5M. He's beating inflation. Add depreciation, appreciation, tax strategies, etc. into the mix and I'm not sure what he's complaining about.

He could have put less money down to have more in reserve. Since there's still room for the property to pay for itself.

If I understand your post correctly your friend's reserves are being eaten up by the cost of repairs, correct? If so then this has nothing to do with cash flow, but more to do with not buying right. Lack of due diligence perhaps?

In fact I would like to thank you for posting this example as this perfectly shows CASHFLOW IS KING. I'm sure a lot of newbies and experienced investors would be happy earning $30K a month in passive income. Your example also highlights that equity/appreciation does not pay the bills since that is exactly your friend's dilemma right now.

I'm not sure what the details are regarding the repairs as it is hard to imagine $30K a month in cash flow is still taking money away from your friend's pocket.

Cash(flow) IS KING!

Steve welcome to BP and thanks for your input!

Tim, very good points. I hope all the newbies will learn from this whole thread.

As the saying goes....CASH(flow) is KING! :D