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Tax benefits for depreciation in real estate syndication dea



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amother
OP


 

Post Fri, Sep 16 2022, 11:05 am
Can anyone help me figure out numbers?
If I invest 50k in a real estate syndication deal, what would depreciation tax benefit be?

Thinking of using HELOC for an investment before the end of the year to lower my taxes. Is that crazy?
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amother
Midnight


 

Post Fri, Sep 16 2022, 11:29 am
Depends on the size of the deal as you are a percentage. General rule is do not mortgage your family home for an investment.
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amother
OP


 

Post Fri, Sep 16 2022, 11:31 am
amother Midnight wrote:
Depends on the size of the deal as you are a percentage. General rule is do not mortgage your family home for an investment.


I don’t think that’s the general rule. Why not have the money working for us instead of sitting in the bank?
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amother
Midnight


 

Post Fri, Sep 16 2022, 11:35 am
amother OP wrote:
I don’t think that’s the general rule. Why not have the money working for us instead of sitting in the bank?


Because your house is at risk. Do you have a way of paying off the heloc another way if the investment fails?
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amother
OP


 

Post Fri, Sep 16 2022, 11:36 am
amother Midnight wrote:
Because your house is at risk. Do you have a way of paying off the heloc another way if the investment fails?


Yes, over a longer period of time.

My house is worth 600k. The investment would be 50k.

How likely is a conservative deal to completely fail, all money lost?
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amother
Mocha


 

Post Fri, Sep 16 2022, 11:55 am
Don’t do it! Don’t do it!

My husband took out a loan against his stock portfolio to invest in a speculative investment.

The investment went belly up right away and now we are broke! And our Shalom Bayis is just terrible.
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amother
Glitter


 

Post Fri, Sep 16 2022, 11:57 am
Coming from the CRE field, I will reiterate the general investment rule that never invest money you cannot afford to lose.
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amother
OP


 

Post Fri, Sep 16 2022, 12:36 pm
amother Mocha wrote:
Don’t do it! Don’t do it!

My husband took out a loan against his stock portfolio to invest in a speculative investment.

The investment went belly up right away and now we are broke! And our Shalom Bayis is just terrible.


What is a speculative investment?

I just googled it. It’s an investment with a high level of risk. That’s not at all what I’m talking about.
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amother
Mocha


 

Post Fri, Sep 16 2022, 12:45 pm
Yes your is too, unless you are the one buying the real estate and renting it out. If anyone else is involved, then you might never see your money again.
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amother
Bronze


 

Post Fri, Sep 16 2022, 12:46 pm
There is a reason why there are widely accepted *rules* regarding prudent investment.

As others have pointed out, you never borrow money in order to invest because you want to keep your home as safe as possible and pay down the mortgage reliably.

Your home has certain protections built in which protect you which even a HELOC doesn't have. It is much more difficult for a home to be foreclosed on.

How much equity do you actually have in your home?

And not to be snarky but the fact that you didn't know what a speculative investment means without googling it indicates that you are not a sophisticated investor and you should learn about investment basic principles before doing anything.

FWIW the best investment advice for middle class people at this point is TO DO NOTHING. If you have stocks, don't sell them and don't buy stocks. It isn't even a great time to buy a home because who knows what the higher mortgage interest rates will do to pricing since people can afford to pay less for a home if mortgage rates go up.

I have a pretty large portfolio and my broker of many years has essentially told me to do nothing. I am keeping enough cash for one year of expenses and - on his advice - I just moved some money into tax free municipal bonds which are about the safest "investment" one can make so long as one doesn't need the money suddenly which I wouldn't since I kept a high amount in a money market fund.
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amother
OP


 

Post Fri, Sep 16 2022, 2:22 pm
amother Bronze wrote:
There is a reason why there are widely accepted *rules* regarding prudent investment.

As others have pointed out, you never borrow money in order to invest because you want to keep your home as safe as possible and pay down the mortgage reliably.

Your home has certain protections built in which protect you which even a HELOC doesn't have. It is much more difficult for a home to be foreclosed on.

How much equity do you actually have in your home?

And not to be snarky but the fact that you didn't know what a speculative investment means without googling it indicates that you are not a sophisticated investor and you should learn about investment basic principles before doing anything.

FWIW the best investment advice for middle class people at this point is TO DO NOTHING. If you have stocks, don't sell them and don't buy stocks. It isn't even a great time to buy a home because who knows what the higher mortgage interest rates will do to pricing since people can afford to pay less for a home if mortgage rates go up.

I have a pretty large portfolio and my broker of many years has essentially told me to do nothing. I am keeping enough cash for one year of expenses and - on his advice - I just moved some money into tax free municipal bonds which are about the safest "investment" one can make so long as one doesn't need the money suddenly which I wouldn't since I kept a high amount in a money market fund.


100% equity. No mortgage.
Correct- I am not a sophisticated investor. So far we have only invested in mutual funds with a financial advisor, and IRA/401K. As well as one small conservative real estate syndication investment with cash we had at the time.

Why would you recommend not buying stocks now? If anything it’s a good time to buy- stocks are on “sale”. I’m talking about mutual funds etc, low risk.
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amother
OP


 

Post Fri, Sep 16 2022, 2:22 pm
amother Mocha wrote:
Yes your is too, unless you are the one buying the real estate and renting it out. If anyone else is involved, then you might never see your money again.


Actually if I was involved it would be high risk because I have no idea what I am doing. That’s why this is attractive to me- passive investing.
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theoneandonly




 
 
    
 

Post Sat, Sep 17 2022, 12:51 pm
I say go for it. We've had a lot of success in real estate syndication deals BH. Feel free to pm me if you have questions.
I don't know if the depreciation will help lower your taxes because you can't net it against active income (salary etc), only other passive or real estate income.
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amother
OP


 

Post Sun, Sep 18 2022, 7:44 pm
theoneandonly wrote:
I say go for it. We've had a lot of success in real estate syndication deals BH. Feel free to pm me if you have questions.
I don't know if the depreciation will help lower your taxes because you can't net it against active income (salary etc), only other passive or real estate income.


This is very helpful! Thanks! I was hoping it could net against active income. Oh well.

I will pm you about other questions. Thanks.
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amother
Melon


 

Post Sun, Sep 18 2022, 8:45 pm
did you people grow up in homes where you heard about this stuff?
did you learn it in school?
are your husbands teaching you?
I feel like a preeschooler listening to 8th graders

How can I learn and teach my kids?
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