Questions for SteveS(CPA)!!! - Posted by Gantry

Posted by JPiper on June 21, 2001 at 10:56:23:

Already replied to this once…but it disappeared. If this duplicates anything my apologies.

Your comments are exactly right. He could do a 1031 with the funds arising from the “rental portion” of this deal (assuming he rented a portion). And it sounds like he has time to implement the things he needs to do to actually do a 1031. Doesn’t sound like he’s sold yet.

Best advice for him is to get with his CPA, go through his options.

Questions for SteveS(CPA)!!! - Posted by Gantry

Posted by Gantry on June 19, 2001 at 19:01:34:

I got lucky and should hit it big on my first real estate deal, now I would like to do more. I and 2 partners bought a triplex in Manhattan Beach about 2 years ago (back when the stock market was doing well). We have it listed, and on the low end, my net should be about $150,000 tax free (I lived there for 2 years). Although I am renting in Huntington Beach now, I would rather put my money to work by building assets than buy a home for myself and my family.

I am very familiar with conventional RE deals but know nothing about L/O and subject to’s. Obviously, I would like to use as little of my money as possible or at least leverage it to buy several properties.

I have a few questions for you if you don’t mind:

  1. What book/course would you recommend that are relevant for CA? I have seen you suggest Bronchick’s cash cow, is it also good for LA?
  2. Do you belong to any investment clubs and do you recommend them?
  3. Is it possible to do NO Money or little money deals in LA and Orange Co’s?

Any other helpful tips would be greatly appreciated.

Re: Questions for SteveS(CPA)!!! - Posted by SteveS(CPA)

Posted by SteveS(CPA) on June 19, 2001 at 22:20:20:


Great job!!! Man, you are doing everything right.

How are you getting the $150k tax-free? Is it not capital gains?

  1. But anyway, pretty much everyone’s courses on this board is first rate, but I like Bill’s courses because; 1. HeÕs an attorney (and I’m a card carrying member of the lawyers relief act) and 2. HeÕs in CA. which means his courses work here. California is the riches and most contract happy state in the union, and I have found his courses very complete in dealing with the CA area. So, I know when I ask him a question about CA he is more likely to know it than someone from another state does.

  2. Yes. I do go to the real estate club in LA. You can find their web page on REI clubs section of this website in the California section. The cost is $20 per visit, but you usually get a lot of good information and meet some really good contacts. Matter of fact, Bill is going to be doing a seminar on the 23rd. If you can catch it would be a great opportunity to meet him and ask him some questions first hand.

  3. haha, that’s a funny question. Yes it is very possible. But, instead of focusing on the more than 10 million properties in Los Angeles county alone. I would focus on a smaller section of LA or Orange County. That way you can get to learn the market of that area and know better where to focus your time, resources and energy.

My only warning would be when you do get the 150k don’t spend it like it was burning a hole in your pocket.

Having a lot of money to invest in real estate is even more dangerous than not having money to invest.

Also, if you don’t have a plan - now is the time to start putting it together. It should be as detailed as possible as to what your investment goals and plans are.

After you have you plan in place, if you have partners make sure they all sign off on the plan and know what they are expected to bring to the table.

Next will be time to put the rest of your team together. If you do not have a first rate real estate attorney get one. And make sure he not only knows what subject to and L/O deals are, but he will be on board when the deals start coming down the pike.

A lot of attorneys will give you a hard time because either they do not understand how this works or even worse they have to go look it up. If you have to educate your attorney what your doing, then unless you really want him on your team get rid of them and find the best one you can that you feel the most comfortable with.

Next find a good CPA and tell him your plans. If he is going to be your personal accountant give him your entire financial profile. By putting him in the beginning of the deals he can help you structure your deals that will be the most tax friendly for you. And you’ll be doing yourself and your accountant a great favor by structuring deals right in the beginning rather than coming to them at the end of the year and saying this is what I done, now help me pay less tax. And I’m not saying to let your taxes determine the deal, but if there’s a more profitable and tax friendly way to do it then you should know that going in.

Finally, get a buyers broker in your area. Find someone who is aggressive and has some energy. I recommend you find an aggressive buyers broker, because these people are the ones who is going to be doing the bulk of the negotiating for you and you do not want someone who is timid or laid back. You want someone who will fight to save you as much as possible and not give away the store on the first deal.

Everyone on your team should have your plan and understand what the objectives are and what is expected from each of them. Once you have laid the groundwork, you will be ready to attack your market. When you attack stick to your plan like glue. If something is not working the way you intended it, do not just abandon it. If you have to abandon a part of your plan, replace it with something better, but don’t just say this is not working and stop doing it completely. That’s the kiss of death that most real estate investors make starting out.

I’m sorry this is so long and I wish I had more time. But that’s the start let me know how your doing.

And good luck


Re: Questions for SteveS(CPA)!!! - Posted by Gantry

Posted by Gantry on June 20, 2001 at 11:05:45:

Thanks for the post. It was extrememly helpful, although I am concerned about your tax free question. It is my understanding that the first $250,000 is excluded from taxes if you have lived at the residence for 2 or more years. Is that not true.

I’ll introduce myself at the next Real Estate Club in LA.

Thanks again,

Re: Questions for SteveS(CPA)!!! - Posted by SteveS(CPA)

Posted by SteveS(CPA) on June 20, 2001 at 12:19:05:


I’m sorry I read right passed the part about it being your personal residence. You’re right, it’s $250k for single filers and 500k for those filing jointly.

Sorry, the speed reading course I took has some flaws.

Have a great day

Re: Questions for SteveS(CPA)!!! - Posted by JPiper

Posted by JPiper on June 21, 2001 at 24:52:50:

Of course he also said it was a triplex…so I guess we should assume he probably rented some portion of the triplex. To the extent that he did that portion of his gain would be taxable.


Re: Questions for SteveS(CPA)!!! - Posted by Sally

Posted by Sally on June 21, 2001 at 10:38:50:

Unless he did a 1031 on that portion.