All Forum Posts by: Steve Vaughan

Thank you for the history, Don. 
Nickerson was definitely the OG of mom and pop residential REI.
I have his 1st book.  Funny to see the PPs, rehab costs and rent rates from the late 50s but sound advice for sure. 

@Amy Bearden. Great. To me you've satisfied the qualifications for a 121 cap gains tax exclusion. I believe the IRS will consider the LLC as a pass-through disregarded entity.

I'm not a tax pro but doubt one would say anything different. 

If the gain is significant I'd probably sell before the 36 months since it became a rental deadline. 

Did you live in it for 2 years?  How long ago did you begin renting it out?

Have to have lived in it for 2 of the previous 5 years to qualify for 121.  That's test 1. 

Then it will come to the vesting of the home vs the vesting of the LLC. Is it exactly the same?

Say you and your spouse owned the home. Is it you and your spouse that are both members and the only members of the LLC? That's test 2.

Does the LLC hold other assets/interest or just this house?     Answer these ?s for better tax pro responses.  

@Sabrina Shaulis welcome back!  Glad to have you👍

@Michael Quarles. Good to see you.  Your podcast episode from back in the day is one of my faves!

Especially this part: Walk-through/ inspection checklist with seller.  Choices= bad, horrible or complete nightmare (paraphrasing).  Then let seller choose. They often chose worse than you even thought.

I just got good at flinching during the initial walk-through but you took it to another level! 

Anyway, I have no idea how to answer your question other than to say many of the old dinosaurs are gone and private equity owns it.  CEO Scott Trench is a good one and trying.  I liked seeing what my colleagues were posting about on my dashboard.  Once that went away, so did I.  

I sometimes peruse unanswered and saw you.  Many may not know who you are but I and many old timers certainly do. I hope they check in and at least say hello to ya.  

In '22 I sold 19 on contract / with seller financing. Another 8 in 2020. Plus singles here and there since 2007. 

I owned them a long time and were most all debt-free.  Typical tired landlord.

I sold interest-only at a bit under conventional rates (my last one in April for instance was 6% in a 7% world) with low down for tax reasons.  

My last duplex fell out because the buyer was asking for a 4% rate.  Risk-free money markets were paying 5%, so no way.  

I wouldn't get hung up on such a low interest rate or interest only. Straight am doesn't add that much more for you while IO adds a level of complexity and seller convincing that's unnecessary. 

If this seller just renovated, hasn't owned it long and has a mortgage, your chances of obtaining favorable to you proper SF are low anyway. Don't do sub2 a land contract or agree to a wrap.  Too much risk. 

I've sold a lot since 2017.  Looking back I don't regret any of them.  They represented headaches and hassles.  Does yours do that?  What's your first thought when you think of it?  

Case by case, one by one, I sold my least favorite smalls by owner as they became vacant while the market was good.  

Other cases- hazard insurance was not renewing or placing high subject to repairs/improvements to maintain or the market cap of my commercial apts was rising as fast as interest rates like in '22. 

I rarely refinanced unless rates were exceptionally low like in 2012 and later 20 teens.  Costs and hassles are high. That's the con of your refi 1 per year plan. 

Always consider taxes.  I chose to carry contracts/ the paper and exit.  1031 if you want to stay in, but have your replacecement property in mind to avoid becoming a motivated buyer.  

You have 90 days to sell/assign your position/interest in a contract.

When I've had these I turned to craigslist,  FB and meetups.   Even the Nickel free and regular newspapers.   You could probably also try the classifieds here on BP. 

Don, is there more insight into what happened with the 2 dogs vs the 1 star?  Huge disparity! 

Or generally, for deworsification, just buy into 10?   I bet there were some takeaways looking back. Thanks! 

With savings rates so high I'd save in a money market mutual fund until I had enough to get rid of PMI on my primary.

In the past I paid off several 6%+ mortgages when savings rates were .4%     The mortgages were 12x higher than I could earn risk-free.  Now you earn more than the mortgage is costing.   

It makes no mathematical sense to pay down anything except to get rid of PMI. To feel more secure if that's the primary goal, I'd just save it in a money market account.