250 K to invest in Real Estate...

[kaboshedx]

any estimations on what the yearly net profit could be on such a 4 unit venture?

to help the tenants situation I could always try to recruit friends who want to move down to Sunny California..

[riverdance]

[ QUOTE ]
If sold together, yes.

[/ QUOTE ]

that is wrong. he would be able to use the 250k exemption on his unit only. if he's got a smart tax man, and he's owned for 5 years, he could get the exemption on 2 of the units.

[riverdance]

http://www.irs.gov/pub/irs-pdf/p523.pdf

see pages 18-19

[SurferEd]

riverdance,

He could simply move to another unit after two years in the first unit, with or without the advice of an accountant.

It turns out you are correct as the law applies to the deductability of capital gains taxes. This can be sometimes worked around depending on how you take title to the property (in terms of working with partners, plus a few other options). This is where the smart accountant comes in.

I have had clients who have been able to get around this requirement by listing someone on title as living on the premises by changing their mailing address to the other units. Of course, this is not legal and I don't condone it by any means. But it is an option others have chosen.

[jaydub]

[ QUOTE ]
riverdance,

He could simply move to another unit after two years in the first unit, with or without the advice of an accountant.

It turns out you are correct as the law applies to the deductability of capital gains taxes. This can be sometimes worked around depending on how you take title to the property (in terms of working with partners, plus a few other options). This is where the smart accountant comes in.

I have had clients who have been able to get around this requirement by listing someone on title as living on the premises by changing their mailing address to the other units. Of course, this is not legal and I don't condone it by any means. But it is an option others have chosen.

[/ QUOTE ]

Umm aren't Realtors(TM) forbidden from providing legal advice?

Of course you don't condone it, you merely suggest it as an option on semi anonymous boards.

J

[SurferEd]

1) Tax advice is not legal advice. Until a lawsuit is imminent, then any further advice would be legal advice.

2) We are not forbidden from providing legal or tax advice. It's better not to for liability purposes, but there are no rules prohibiting it.

3) Saying what others have done in the past is relaying an experience. If I tell you it's illegal, and you choose to follow through, the burden of the law will rest on your shoulders.

S

[Slacker13]

I have been investing heavily in the Panama City, Florida area. I have been buying both commercial and residential property. IMO there is no better market out there at the moment. CNN/Money magazine recently announced it as the number one place to invest your money.

The main reason I am there is because they are ready to break ground on a new International Airport.

Large companies out of Atlanta, Chicago, New York have been buying very large tracts in the area.

This market seems completely unaffected by the recent RE downturn. And I expect a jump in prices as soon as the airport breaks ground.

Travel magazine listed PCB as the top 10 most beautiful beach in the world.

I could go on all day about the area.

[Grasshopp3r]

[ QUOTE ]
Are you willing to take on a mortgage?

If so, I would recommend a 4-unit residential property. If you live in one of the units, you can watch over the property and deduct the hell out of it.

More than four units, and you are dealing with commercial loans.

If you are interested at all in San Diego County, let me know!

[/ QUOTE ]

4 units and smaller will qualify for FNMA loans, which are the most attractive leverage and rates. If you are not going to live in the property, you need to be very careful on how you set up a management company.

[CrushinFelt]

I hate real estate. Too thick. Too much luck involved.