Anonymous wrote:

+1. I'd love to understand the economics of the PP with 24 units in Chicago.

My friend does this. You give the basement unit to a handyman-type person who manages the building in exchange for no or reduced rent. The person is usually a handyman by day in their day job, and then helps with your building the rest of the time. Win-win for both sides.

For finding tenants, you can just outsource that to someone local and pay them a fixed fee. Credit checks easily done online. Non-paying tenants (eviction) paperwork easily handled by a lawyer or representative.

Anonymous wrote:Bought small SFH in 2006 Pimmit Hills, $300/month

Bought with zero down, have about 100k in equity.

Bought small SFH in 2006 Pimmit Hills, $300/month

I own a commercial rental property that is leases under a long term absolute net lease. (i.e. tenant pays ALL expenses including taxes, insurance, and maintenance) and clear $8,500 per month. Had a portfolio of 11 residential properties that I sold and rolled into this via a 1031 tax free exchange. Funds are wired directly into my account monthly and I've never once talked to the tenant in the 7 years I've owned the property.

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:We are in he negative every month wrt mortgage and fees. However we make up for it at tax time

How? How can you write off the loss of you aren't in the real estate business and make more than $110,000 a year?

I would assume s/he is depreciating the property.

But even if you depreciate, you can't offset anything but rental income right? I don't own any rental property, but it doesn't seem worth the effort of dealing with tenants if you don't make any money.

I don't own rental property but I would think the main draw is the tenant paying the mortgage and building up your equity for you.

I disagree. There is an opportunity cost to tying up a down payment. If you have $150K you can put it in the market and make an average annual return of 7%. IMO rental property should return more than that to be worth the investment - not to mention the time and trouble.

I don't think you understand leverage. Your 7% return in the market is based on your total investment. If you buy a $500k property with that $150k, you hopefully get: (1) the appreciation of the property, which is based on the $500k house appreciating with the return calculated on your $150k cash, so a 10% appreciation over 2 years is a 33% return; (2) the monthly positive cash flow; and (3) the rent paying down the mtg.

I buy foreclosures. I bought one worth $180k for $140k last year in a market with better price/rent ratios. The property clears $400/month. So I get about a 8% return in year one on my cash from rental stream, not to mention the $50k in equity through buying undermarket, appreciation in a year and mtg paydown.

$600 mo / small rowhouse in NW DC

Around $50k true net a year after all expenses and management fees and I have none of my own cash in them at this point.

15 rental properties and about $3.25M in equity.

Own 2 houses in San Diego (no mortgage). Net ~$5k per month.

Covers the mortgage, definitely a good long term investment but not much income.

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:We are in he negative every month wrt mortgage and fees. However we make up for it at tax time

How? How can you write off the loss of you aren't in the real estate business and make more than $110,000 a year?

I would assume s/he is depreciating the property.

But even if you depreciate, you can't offset anything but rental income right? I don't own any rental property, but it doesn't seem worth the effort of dealing with tenants if you don't make any money.

Yes, this is what I'm asking. Unless you make less than $150,000 you cannot deduct rental losses.
In my case
Rent $2000
PITI $1000
Condo frees $700
Expenses $100
Depreciation $1000

I have cash flow of $200, but a tax loss of ($800). I can't deduct that $800 x 12 each year. I have to wait until I sell the condo when I'll have a huge loss thanks to depreciation.

You cant include principal in your tax loss calculation, so its less than 800/month unless you have IO mortgage.
And yeah, 1000/month will be subject to depreciation recapture @ 25% when you sell

I make about 400 a month for a condo in Germantown (including taxes, condo fees, etc. but not including repairs).

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:We are in he negative every month wrt mortgage and fees. However we make up for it at tax time

How? How can you write off the loss of you aren't in the real estate business and make more than $110,000 a year?

I would assume s/he is depreciating the property.

But even if you depreciate, you can't offset anything but rental income right? I don't own any rental property, but it doesn't seem worth the effort of dealing with tenants if you don't make any money.

Yes, this is what I'm asking. Unless you make less than $150,000 you cannot deduct rental losses.
In my case
Rent $2000
PITI $1000
Condo frees $700
Expenses $100
Depreciation $1000

I have cash flow of $200, but a tax loss of ($800). I can't deduct that $800 x 12 each year. I have to wait until I sell the condo when I'll have a huge loss thanks to depreciation.

no, you wont.
Google Depreciation recap

Exactly. I think the depreciation recapture capital gains tax is 25% minimum, I think if the recapture is higher than the capital loss claimed.

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:We are in he negative every month wrt mortgage and fees. However we make up for it at tax time

How? How can you write off the loss of you aren't in the real estate business and make more than $110,000 a year?

I would assume s/he is depreciating the property.

But even if you depreciate, you can't offset anything but rental income right? I don't own any rental property, but it doesn't seem worth the effort of dealing with tenants if you don't make any money.

Yes, this is what I'm asking. Unless you make less than $150,000 you cannot deduct rental losses.
In my case
Rent $2000
PITI $1000
Condo frees $700
Expenses $100
Depreciation $1000

I have cash flow of $200, but a tax loss of ($800). I can't deduct that $800 x 12 each year. I have to wait until I sell the condo when I'll have a huge loss thanks to depreciation.

no, you wont.
Google Depreciation recap

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:We are in he negative every month wrt mortgage and fees. However we make up for it at tax time

How? How can you write off the loss of you aren't in the real estate business and make more than $110,000 a year?

I would assume s/he is depreciating the property.

But even if you depreciate, you can't offset anything but rental income right? I don't own any rental property, but it doesn't seem worth the effort of dealing with tenants if you don't make any money.

Yes, this is what I'm asking. Unless you make less than $150,000 you cannot deduct rental losses.
In my case
Rent $2000
PITI $1000
Condo frees $700
Expenses $100
Depreciation $1000

I have cash flow of $200, but a tax loss of ($800). I can't deduct that $800 x 12 each year. I have to wait until I sell the condo when I'll have a huge loss thanks to depreciation.

$350 a month, unfortunately we had to put almost $7k in repairs in last year. Only holding on to the property because it's underwater.