Side Hustle
#871
Gets Weekends Off
Joined APC: Oct 2015
Posts: 270
Look at 30A real-estate in FL. Huge rental market with free cash flow even with only 6 month weekly rental. Hang out at the beach the other 6 months. Last year was 40% appreciation and due to how small the area is I don't see that slowing down much. Very safe and desirable getaway for families..
#872
I pay an accountant a lot of money to figure that stuff out. I'm not really worried about it though. I don't think buying a rental house with a ROTH and plowing all the income back into said ROTH is an issue in either of those cases. As far as trying to write off a new truck or something equally as stupid in the process... well... duuuuh. The disasters I think one could find oneself in would be the result of putting the gun to one's own foot and pulling the trigger. On cursory looks... and I have not done the deep dive on it but as long as everything stays within the SDIRA, I don't see taxation as an issue with the possible exception of being without a renter and having to 'loan' the IRA some money to cover any mortgage that you might have.
#873
I pay an accountant a lot of money to figure that stuff out. I'm not really worried about it though. I don't think buying a rental house with a ROTH and plowing all the income back into said ROTH is an issue in either of those cases. As far as trying to write off a new truck or something equally as stupid in the process... well... duuuuh. The disasters I think one could find oneself in would be the result of putting the gun to one's own foot and pulling the trigger. On cursory looks... and I have not done the deep dive on it but as long as everything stays within the SDIRA, I don't see taxation as an issue with the possible exception of being without a renter and having to 'loan' the IRA some money to cover any mortgage that you might have.
Get a good understanding of UBIT and IRC 4975. Google it, then talk to your tax person.
#875
Gets Weekends Off
Joined APC: Nov 2011
Posts: 4,498
Look at 30A real-estate in FL. Huge rental market with free cash flow even with only 6 month weekly rental. Hang out at the beach the other 6 months. Last year was 40% appreciation and due to how small the area is I don't see that slowing down much. Very safe and desirable getaway for families..
#876
Can't abide NAI
Joined APC: Jun 2007
Position: Douglas Aerospace post production Flight Test & Work Around Engineering bulletin dissembler
Posts: 11,989
I've always been overly careful with the IRS. Even if you "win" defending yourself is going to take a lot of time that pilots do not have.
#878
As much as I like to espouse the benefits of real estate, there can be downsides, especially with syndications. In one particular investment, the group of investors is in the process of removing and replacing the manager. I am working alongside the other investors to get this done as quickly as possible. Being a passive investor in a property isn't always passive. Sometimes you have to take action to protect your investment. The most important thing I will point out about this particular scenario is that all of the investors in this property are educated on the terms of the agreement and we knew going into the deal there was a provision to remove the manager with a majority vote. Check your syndication documents carefully before signing, some offerings make it very difficult to remove the manager. More to come as we continue the remove/replace process...
#879
Roll’n Thunder
Joined APC: Oct 2009
Position: Pilot
Posts: 3,509
As much as I like to espouse the benefits of real estate, there can be downsides, especially with syndications. In one particular investment, the group of investors is in the process of removing and replacing the manager. I am working alongside the other investors to get this done as quickly as possible. Being a passive investor in a property isn't always passive. Sometimes you have to take action to protect your investment. The most important thing I will point out about this particular scenario is that all of the investors in this property are educated on the terms of the agreement and we knew going into the deal there was a provision to remove the manager with a majority vote. Check your syndication documents carefully before signing, some offerings make it very difficult to remove the manager. More to come as we continue the remove/replace process...
#880
-Allocation of offsite management expenses to the property. This expense was already covered in a separate management fee paid as a percentage of revenues.
-Showed property expenses for repairs that had not yet been completed.
-Manipulated move out dates to artificially inflate physical occupancy. This did not impact economic occupancy or actual revenue, just physical occupancy calculations.
There may be more uncovered in the coming days as the investors take a closer look at the books and conduct physical inspection of the property.
A key point to be made is that the investors had the ability within the company agreement to remove a non-performing manager. Some syndications are more investor friendly others are more syndicator friendly. You must know the language and DYODD on the agreements.
-Showed property expenses for repairs that had not yet been completed.
-Manipulated move out dates to artificially inflate physical occupancy. This did not impact economic occupancy or actual revenue, just physical occupancy calculations.
There may be more uncovered in the coming days as the investors take a closer look at the books and conduct physical inspection of the property.
A key point to be made is that the investors had the ability within the company agreement to remove a non-performing manager. Some syndications are more investor friendly others are more syndicator friendly. You must know the language and DYODD on the agreements.
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