Anyone with plans to get out of tinting?

TomTint · February 20, 2013

I'm closing on a four plex right now, Not really as a means to leave any job, its just my retirement fund. When its paid off in 30 years that will be my social security check I can guarantee.

I have a commercial investment property. My accountant advised me to have it mortgaged to the hilt and keep it that way. The logic behind the thinking is that rent in excess of basis is taxable. Borrowed money is not. So if your 4 plex generates 4000.00 per month gross rental. The property should be mortgaged for whatever P&I plus RE tax is 98% of 4000.00 per month. Speaking with some other savvy investors I know... This is how they have done it for decades.

Fiveofeen · February 20, 2013

I'm learning the strategies now. Mine is not near that, it will cash flow really well. But that should allow me to purchase more properties since 75% of the rents can count as income and that more than covers the mortgage for the place.

Who knows, I'm new at it. I just know one thing, you can't get rich on a W2.

kats2112 · February 20, 2013

I'll never understand why some people are willing to spend 100 on interest (or anything) to save 30-35 on taxes.

TomTint · February 20, 2013

I'll never understand why some people are willing to spend 100 on interest (or anything) to save 30-35 on taxes.

Interest is tax deductible, borrowed ( mortgage ) money is not. Keep investment property mortgaged until you sell it and take the profit as capital gains (15% tax) the Gubment has installed penalties for real estate investors, buried in Obamacare. The formula is going to change, and state laws vary. As of now, if you take rent as ordinary income, you are taxed at whatever rate you fall into.

kats2112 · February 21, 2013

Thanks Tom that helps me. Some. It still equates to spending in order to get a tax break on a fraction of what you spend.

If you had a PAID FOR rental property that yields 100k, would you go finance it so you could make 65k, and only pay tax on that 65 instead of 100?

And then there's risk. 100% of foreclosures are levied on properties that have mortgages. There is never a bank foreclosure on owned property.

lostinbama · February 21, 2013

I'll never understand why some people are willing to spend 100 on interest (or anything) to save 30-35 on taxes.

I completely agree! They're not calculating RISK.

TomTint · February 21, 2013

Thanks Tom that helps me. Some. It still equates to spending in order to get a tax break on a fraction of what you spend.

If you had a PAID FOR rental property that yields 100k, would you go finance it so you could make 65k, and only pay tax on that 65 instead of 100?

And then there's risk. 100% of foreclosures are levied on properties that have mortgages. There is never a bank foreclosure on owned property.

If I had a paid for rental that grossed 100k per year/ 8300. Net 5400 Per month, than yes I would take the loan, deduct the mortgage Interest and put the 100k in my pocket tax free. Let the property appreciate and refi again. When it comes time to sell. Do so and take proceeds at 15% tax rate for capital gains.

TomTint · February 21, 2013

By the way, I have a bit of experience with property investments. I advise you to go over it with a financial planner and decide weather it is a turn and burn property or a long term investment.

TintJunkie · February 21, 2013

Interesting Tom. Never thought of it like that. I have a lot to learn.

dan_kohan · February 23, 2013

I don't want to do real estate, I was just using that as an example of a biz after tinting.

Im just really frustrated from not making what I want in auto tinting. I just can't compete with these low ballers anymore, its just really too hard to stand out. I've been fighting hard for sales, but in the end they just wan that cheap price. I would have to drop my prices by $40 to compete with these guys and I won't. I don't just want to make a living with tinting, I want to make a descent profit.

Also, I can't stand mobile tinting anymore. I get annoyed if anyone even talks to me and its making me not like tinting anymore. Hell, last week someones 4 year old pointed a BB gun point blank range at my face. I really don't want to quit tinting, I may just take a break and come back with a shop to work in.

thats all I used to do for the first few years. at first I didnt mind it but now I will never do another mobile job. packing up your gear, unpacking it, then packing it back up, driving across the city, only to find out your gonna be working in a dirty dusty garage with the door open on a windy day.... ect. screw that. never again. now I just work out of my house. Its nice and clean, got my peel boards mounted on the wall, my tunes turned up and take food breaks whenever I want. sometimes my truck doesnt move from the front of my street for a week haha, the only place I go during the week is the gym which is 4 blocks away. haha , with the amount of money I save on gas and no overhead costs, I make a killing.