Thats great, i just returned from disney and did a deal sitting in France" epcots France" lol. Keep going, its alot of fun, can make your relationship with your family or friends stronger, and help you drive the car you have always wanted. Guess you could buy a boat if you wanted lol.
dsandlin,
No, you don’t pay taxes on borrowed money. But you have property taxes that you will pay, no way around it. You pay taxes on ALL net income less depreciation. Seldom will depreciation cover all of your net income, so you will pay some income taxes. 1031s are for capital gains, nothing else.
The only way you can totally avoid taxes is by going on the lamb from the IRS. It’s one of the two certainty’s of life.
i totally agree with the real estate taxes, im talking about personnal taxes. If you are using money from your homes its tax free. Im dating a cpa that does the work for me and have spoken with other accountants and havent paid anything. Im interested in what you said and would like to know where you received your information or is it first hand?
cool website by the way. Hope you are doing well
I guess by personal taxes you’d mean income taxes. “Money from your home” I assume mean a home equity loan or HELOC. That’s borrowed money, not income, so there is no tax on that. When you have an income of any kind (rents) you pay taxes on that income, less operating/ business expenses, and the intangible expense of depreciation. That becomes your taxable income.
I received my information from the back of a cereal box so it could be entirely wrong…
lol, was that kellogs? i knew i was missing out not eating that in the morning. I completely agree with youyr statement. Yes the money i was talking about was from helocs. with enough houses though ive been able to write off enough from my rental money. So my taxable income is nearly non existant after all is taken out. I appreciate the chat. Do you have rental properties or do you primarily flip homes?
Do you have rental properties or do you primarily flip homes?
Atleast 1 or 2 of each.
Per day?
I’ve been on this site now for about 2 months and it is a gas to watch you two (danny and rich) go at it. You two are a card. You guys keep the humor in a subject that us beginners are struggling with and it makes it easier to deal with. Please keep the joke and razzes going its great.
yeah, you don’t get taxed on loans but you don’t get to KEEP that money free and clear…you have to pay it back with interest.
and you can 1031 and keep rolling it over but when you want money to KEEP free and Clear without it being a Loan.
you Will then be Taxed
sure its a loan so you have to pay it back but use rental money to cover the cost. Are you paying for it sure through loss on rental money to cover the loan but besides that the money is in your account and not killing you the way you would if you made 100 grand a year and needed to be taxed locally and govt. Main point is you have a ton more money in your account and alot less in the govt’s
that’s a pretty good idea…I don’t have any rentals, in the Future hopefully
the houses i buy i usually get for around 10 to 15K sometimes up to 25K the rents are on average 500 per month single and 750 to 900 duplex. You know how much even a loan with 9% would cost. Now the actual retail value of the homes are alot more than this so i pay 15 grand, rent out the house for lets say 500 then get a loan for 60 or 70K and the renter pays for the entire mortage or heloc. Now you have cash to pay yourself back for the original 15 or go ahead and buy 4 more and do the same. once you do enough you will be getting into commercial loans but either way it turns out the same with you having a ton of cash on hand for purchasing houses, cars, rehabbing a few flips. always having someone else pay for your mortgages is the way to go and allows you to grow quickly.
i don’t have THat puzzle piece 
lol, its one of those tricky ones you try to shove into the space its not meant to be in
Your thinking is correct but learn first and use residential until you know what you are doing. There is inherently less risk and you don’t need as much money down in general.