All Forum Posts by: Tushar P.

If you are doing all the work for your rental - leasing, rent collection, property management, cleaning upon turn, etc - then maybe you satisfy the “material participation” requirement even though you don’t put more hours than your W2 job and are not a real estate professional. If so, you can offset the rental losses with active income. Check with your cpa.

If you are unable to get the money from a bank (which has higher risk tolerance), do you think it is reasonable to ask a family member for it?  Tread carefully, unless this investment is of more importance than the relationship itself.

There is always conflict of interest. They would want you to buy even if it is not a good investment. And if they are investors themselves, most likely they will put the agent hat only when they don’t want the property for themselves. Perhaps work with wholesalers rather than agents - the conflict of interest may not be completely eliminated but greatly reduced.

@Jenny Sung curious why you are seeking a tax specialist with familiarity about filing taxes in multiple states to be located in Texas, which doesn’t have any state income tax.

I was going over my tax returns for the last few years (filed by PwC and Deloitte) and I thought I will have several state returns (along with the federal) since I had many schedule K1 1065 forms via MLPs, but there are no state returns. I guess that’s because the basis depicted in K1 keeps getting increased every year showing the gains to be low enough not to exceed the threshold for filing the state taxes. What that means is that you may not have to file any state returns unless you exceed a certain income threshold - each state has a different limit. I don’t know if my observation makes sense - it’s just an observation and I’m just trying to understand state filing requirements myself.

@Jordan Moorhead Why only say that there is no income tax, without mentioning high property taxes?

Another thing I’ve seen agents/brokers say is that lock down the low interest rate for years so that the monthly payment stays the same while rent would increase with time, completely ignoring that the monthly payments may increase at a faster rate than the rent due to taxes and insurance.

I also wonder why the brokers/agents say to a buyer that they are free to them, without adding that they will negotiate hard to bring the price down by at least 6% from the market value.

And so many other things brokers/agents say while they ignore the other side of the coin completely... why?

@Luis Rodriguez I guess you don’t like a dose of your own medicine? And so you are asking if you should get malpractice insurance? You are probably not a doctor, so that is just an analogy.

Nice thread - tech savvy spammers pretending to help by sharing their experience with the tool vs tech challenged oldies/boomers who have nothing to show except the number of posts. Quite entertaining!

Just invest into real estate syndications. The income will be passive, and can be offset via the paper losses. I’m doing it the other way round. Invested into syndications (exits ranging from 3-10 years) and now buying rentals so that income from syndications can be offset by the rental depreciation losses. Once the machine starts, it will need to be balanced with appropriate number of syndications and rentals as the years pass by, just so that all the income can be offset by all the losses.

Rich people don’t buy a home with loan from the bank. They buy it with cash. It’s for poor people to take loan from the bank and buy a home dreaming it’s an asset. Poor people even buy cars and furniture on loan. Poor people don’t understand opportunity cost either - they just look at fixed costs and compare apples with oranges. But poverty is a relative thing. What kind of house someone could be living in if the mortgage payment after zero down is $900?

@Brian Eastman I see your perspective, though it seems more geared towards those focused on preservation rather than growth. Of course, everyone’s situation is different and they need to decide for themselves what they are comfortable with. 

@Carl Fischer I use Roth for tax-inefficient investments. Putting a tax-efficient vehicle into a retirement account seems inefficient use of resources. I'm specifically talking about rental property in SD-IRA.

@Ruth Lyons the point is that the rental income can be tax-deferred without the SD-IRA. And if you want to go a step further and harness the depreciation loss, you will not be able to do so if you put the rental property in a SD-IRA.

I understand there are no blanket statements and each person needs to evaluate their situation and determine what works for them the best. I am just trying to understand the pros and cons better.