Comments on: Real Estate Investors – IRS Rules – Surprise Capital Gains

By: BawldGuy

BawldGuy — Wed, 09 Dec 2009 19:44:26 +0000

That example is why Purposeful Planning must be so flexible.

Even if you’d refinanced, it most likely would’ve resulted in being caught in a ‘loan over basis’ situation. Not necessarily terrible, but not something you strive for.

By: Robert Coté

Robert Coté — Wed, 09 Dec 2009 19:34:58 +0000

Jeff,
Now you know the anguish I went through when in the spring of ’06 I weighed the consequences of “cashing out” of a fully depreciated property and a Starker to a sane investment.

Next time I’m not going to let LTV debt go too low.

By: Peter Giardini

Peter Giardini — Wed, 09 Dec 2009 07:08:44 +0000

Great post…

Next to developing a plan, building a team has got to the most important.

Regarding finding a specific professional… ask around. Attend local real estate association events and network. Many agents, title attorneys, and lenders can make recommendations.

By: Peter Maclennan

Peter Maclennan — Wed, 09 Dec 2009 06:30:02 +0000

Jeff,
I would love to know your perspective on finding the right team to assemble.

How do you go about determining if a CPA/attorney/real estate professional has the knowledge or experience to keep an investor from these types of pitfalls?

By: Joshua Dorkin

Joshua Dorkin — Wed, 09 Dec 2009 04:55:19 +0000

I’m with you 100%. I’ve had experience with team members that weren’t fully equipped to give me the right answers, and it cost me. It isn’t just about building a team, but building one with people who are fully equipped to answer ALL of your questions the right way.

BTW – Thanks for the plug Jeff!

By: BawldGuy

BawldGuy — Wed, 09 Dec 2009 04:25:34 +0000

Hey Joshua — And the congregation said Amen!

The unspoken problem with due diligence and so-called research and team building, is of quality.

All CPA’s are not created equal. Research by an ‘investor’ with a couple years experience more likely than not to have more gaps than gold. The proliferation of the ‘information age’ has had a paradoxical affect on those relying on books, internet research, etc.

Your point is well taken. I’d only add that the team building should be the gold standard — not the amateur research, learning curve. More trauma is generated by those equipped with 80% of what they need to know than most realize.

Catch ya later.

Readers: Click on Joshua’s name above his comment and check out an incredible real estate investment blog.

By: Joshua Dorkin @ BiggerPockets

Joshua Dorkin @ BiggerPockets — Wed, 09 Dec 2009 04:05:47 +0000

It really amazes me that people will get into the BUSINESS of real estate investing without establishing the appropriate team to guide them through. These guys got lucky and saved a bundle (for now), but not everyone is so lucky. These are the kinds of lessons that you want to read about instead of experiencing yourself.

To make sure that happens, you must do your due diligence, research, knowledge building, planning, team building, and only when you’ve got ALL of these in place, should you get into the business of real estate.

Nice work saving these guys!