patrick.net

Goran_K says

Tenpoundbass says

Wow you done squeezed lightening from a yam.

I dye my hair every now and then just so stand out from all of the other RESJW.

Bought around same time 2011, this site more than any other saved me from buying in 2006.

Goran_K says

So after all is said and done, I will probably have $1.4-$1.5 million of cash to invest someplace (my profit + recovered downpayment), about $380,000 in current investment account value, and a $400,000 modest farm in Nevada.

Don't forget capital gains tax.

So you only purchased your ex-primary residence because your then landlord was raising your rent, but you just on a whim, decided to buy a $675,000 condominium to rent out, also, at that same time?

And both of those purchased properties nearly predisely doubled in the intervening 4 years?

ALSO -

"[A friend] stayed in the [west LA condo] for 2 years paying $2700 a month. I also had a tenant afterwards who was paying $3100 a month until I sold the place."

So, let's just call that $2,900/month for 4 years.

48 x $2,900 = $139,200.00

(minus property taxes, maintenance, etc.)

Your alleged gain alone on your principal residence purchase was 1.25 million USD

Assuming that you're married, you can roll over $250,000 per spouse ($500,00 total) of gain, tax-free, into a new PRIMARY (not investment) home/residence.

Assuming that your new home in NV is your primary residence, and you took full advantage of the max $500,000 per married couple rollover, you'd pay capital gains tax of 15% + California state income tax (California has among the highest taxes in the nation, with the highest marginal rate of 13.3%), on the difference between the $500,000 exempt amount and the $1,250,000 gain.

That's 1'250'000 - 500'000 = $750,000.00 you'd have to pay tax on regarding your primary residence gain, plus tax on $100,000, because your new primary residence was $100,000 less than $500,000 of the dual-spouse rollover amount tax exemption.

Let's just say you're a $100,000 earner - your CA state income tax rate would equal approx 7.8%.

So 15% plus 7.8% = 22.8%

22.8% x $760,000 (remember, you allegedly rolled $400k not $500k into your new NV home) = $172,380 in tax due on gain on primary residence.

Your net gain would be less than what you're stating based on your "1.6 million" figure.

As to your "investment condo," that you allegedly purchased, the full alleged gain over initial purchase price would be subject to a 22.8% tax on the full gain of $625,000.

$625,000 x .228 = $142,500

$625,000 - $142,500 = $482,500 in the best case scenario.

You're total tax, in the very best scenario, is $314,880.00

So that alleged 1.6 million is now $1,285,120.

You put $400k of that into your new NV residence.

Notice that I didn't even get I to carrying costs, property taxes, maintenance costs, closing costs, commissions, deed transfer taxes, etc.

You have impeccable timing perfectly timing the bottom on both your now ex-California purchases.

You fail to break down specific additional tax liabilities and carrying costs.

You smell of some bullshit.

freespeechforever says

Assuming that you're married, you can roll over $250,000 per spouse ($500,00 total) of gain, tax-free, into a new PRIMARY (not investment) home/residence

you don't know what you are talking about, and you criticize someone else???

You don't have to "roll over" gains of personal residence, and haven't had since 1997.

He can just flat out keep 250K single or $500K married in gains on the primary residence.

On the investment condo, the entire net profit (i.e. minus all expenses to sell) would be taxable income. Likely taxed quite a bit in his case, since his income is and will be high for the year, plus depreciation recapture.

In any case, he posted his purchases years ago and those numbers aren't out of line for what the market has done in the meantime, so your doubting him is more likely based on pathetic jealousy than any reason.

Might I add, assuming your alleged purchased and sales happened as/when you claim, you were magical in securing two mortgages without 20%+ down at a time when few were lending, and especially on "investment/rental" properties. So congrats on that, too.

Or did you pay cash for both?

Your alleged 1.6 million in gains is no more than a theoretical 1.28 million under the ideal/best case (minus other expenses I didn't break down).

You now allegedly have $880,000, at most, after purchasing your NV property/residence, with which to play/invest, so there's that, assuming you, one of the best property timers I've heard of, maxed out all tax benefits (married spouse double x $250k principal residence purchase gain rollover), etc.

Strategist says

Don't forget capital gains tax.

Yes, my tax situation will need to be settled for sure.

freespeechforever says

You smell of some bullshit.

I posted about my purchase at the beginning of 2013 when I closed (I offered in the fall of 2012). You can search my post history, it's there clear as day and I described exactly where I bought, and why I bought at that time.

I know a lot of people tend to "make shit up" on the internet, but you have to admit, posting about something 4 years ago, then coming back 4 years later just to "make something up" seems like an awful lot of effort just to make it all up. Don't you think?

edit: Here I saved you the effort of having to look, here is my post, http://patrick.net/Goran%3A+Joining+the+debt+slaves%3F

Notice the posting date "January 13th, 2013, on a Wednesday". I remember that day clearly, my neighbor (who has also since sold and moved) left a good wine on my porch to welcome me to the neighborhood. I took a picture of that bottle if you'd like more proof. :)

"You don't have to "roll over" gains of personal residence, and haven't had since 1997.

He can just flat out keep 250K single or $500K married in gains on the primary residence."

Has no effect whatsoever on numbers I put up as I'd given him the full benefit of the doubt that he had rolled entire $500,000 principle residence (owned for minimum of 2 years) gain-on-sale exemption from capital gains taxation.

freespeechforever says

Might I add, assuming your alleged purchased and sales happened as/when you claim, you were magical in securing two mortgages without 20%+ down at a time when few were lending, and especially on "investment/rental" properties. So congrats on that, too.

Or did you pay cash for both?

Your alleged 1.6 million in gains is no more than a theoretical 1.28 million under the ideal/best case (minus other expenses I didn't break down).

You now allegedly have $880,000, at most, after purchasing your NV property/residence, with which to play/invest, so there's that, assuming you, one of the best property timers I've heard of, maxed out all tax benefits (married spouse double x $250k principal residence purchase gain rollover), etc.

I only had a mortgage on the West LA property. Securing that mortgage was not hard for me at the time, I had plenty of cash sitting around (remember I live a pretty modest life).

I'll let my accountant sort out the numbers. :)

Does anyone remember Roberto or the Duck avatar guy? Did they end up selling all of their stuff too? If I remember correctly, Roberto was pretty well invested in Arizona, and duck guy was invested heavily in Concord.

Goran - My numbers above stand, but I believe you now that you directed me to that much earlier posting.

Moreover, I need to sincerely apologize for being prickish, particularly since you genuinely seem to be a very polite, decent and NICE fellow human (the world needs moreAN

Congratulations on your gains. Seek competent tax advice from an ethical, sharp CPA on how to minimize your taxes on those gains.

Free advice - You may want to hold off investing in INVESTMENT real estate for a while as institutional money is creating massive imbalances as it flows into all segments of real estate now, having already inflating another massive bubble, only to leave pension funds, insurance company shareholders, REIT limited partners, etc., holdng the bag in the aftermath of what's about to happen (again).

The bears have been wrong for 5 long years in property, equity and bonds, but they failed to appreciate the full measure of the "awesome wicked set of tools" the world's central banks would deploy in the prior years.

Alas, those tools are becoming increasingly and massively less effective, bordering on impotent, and have now actually become market-distorting and investment-seeker weapons of mass destruction in and of themselves (see Japan).

As I've heard from the brightest person I know and now share in his belief, 2008 to 2009 was an appetizer for what lay ahead.

p.s. - Congrats on getting out of residential real estate within a year or 18 months (at most) of what I believe the top will be, before capital controls and other factors counter-act the cocaine-like effects of NIRP/ZIRP and yet-again silly lending standards (3% down FHA mortgages to sub-700 FICO score buyers now comprise 80%+ of existing/new home mortgage originations again).

Central banks did reflate the financial sector, asset values, with only tepid (relatively) ancillary benefits to labor markets and even the "booming" manufacturing sector (just wait until you all see how quickly large corporations can lay off heads as a 1st response to slowing sales/revenue and in attempts to preserve cash during the consumption downturn that's already begun).

It's alright man. I used to be a "regular" on Pat net, I'd say the "golden age" of the Bear vs Bull battle. But that was years ago, and internet communities always change so I'm not surprised you didn't know of my history here. I learned a lot from the people here and miss the verbal tete-a-tetes between the opposing sides.

Believe it or not, buying a house at the time felt like "settling". I felt that I had betrayed the "bear cause" by caving in to my more base desires (which were to have a bigger place for the family). But it ends up, if you just buy when you are ready and don't think about it too hard as long as you're not absolutely buying way above rental parity (which I wasn't at the time), you'll be alright.

Now I'll be some red neck who lives on a small farm, raising a few sheep, chickens, and maybe I'll have a rifle range in the back. Kind of tired of living where there are too many people...

Goran_K says

It's alright man

I remember you well. Good job. I have not sold my place yet as it did not appreciate quite as dramatically as "prime" area like Laguna Beach.

I am curious, who were the buyers for you Laguna house, just general description.

tr6 says

I am curious, who were the buyers for you Laguna house, just general description.

curious myself...

tr6 says

I remember you well. Good job. I have not sold my place yet as it did not appreciate quite as dramatically as "prime" area like Laguna Beach.

I am curious, who were the buyers for you Laguna house, just general description.

The buyers weren't strange IMO. Middle eastern couple, two boys in their teens, they had 50% down, and financed the rest through Chase. The father works in Los Angeles as a property developer. They moved from Toronto, and the oldest boy wants to attend USC. No fancy cars either, I think the father's main car is a Honda accord.

Goran, I'm in my early 40s, am an attorney (hence the prickish first response to you; stereotypes often ring true, unfortunately) in the Midwest, and I both develop commercial real estate and counsel other developers that do.

After MY ignoble first interaction with you, I understand the needs to obtain a DOMICILE at the time you did and for the reasons you fire, having a your daughter of my own.

Anyways, the next time I'm out in LV, Reno or Henderson (about 3x per year), I'd buy you a few rounds if you'd accept, as a small peace offering.

You seem to be a righteous dude, and it sounds like we my have a lot in common.

haha, I'd be cool with that.

I remember when Patrick used to have meetups in the Bay Area. Too bad I never got out to the South Bay during that time to see all the screen names in person.

Goran_K says

I remember when Patrick used to have meetups in the Bay Area.

Are these meet-ups still happening?

What does a partick.net meet-up look like?

jazz music says

Wow, sounds like you really stuck your neck out and won.

It was a guaranteed win. Still is.

jazz music says

Strategist says

It was a guaranteed win

How is that different from what they said in 2002?

We had no stated income and sub prime in 2012.
The next phase of a real estate boom has just started. 2016 will go down in history as another buying opportunity. Remember......"fortune favors the brave."

BayArea says

Are these meet-ups still happening?

What does a partick.net meet-up look like?

haven't had one in a couple of years. is it time to do it again?

Goran_K says

Now I'll be some red neck who lives on a small farm, raising a few sheep, chickens

My father decided to raise chickens a few years ago. At first everything was OK. Then one day he decided to kill one of them for some reason (soup or it was sick, I don't know) and figured out he can't do it. Now whenever this has to be done, he summons my (very old) grandmother. Hope you have thought out this part carefully.

rando says

What does a partick.net meet-up look like?

This is a great idea.. we should have a patrick.net meet up!

rando says

haven't had one in a couple of years. is it time to do it again?

What a coinkidink! With me planning a trip up there this summer, and all.

BayArea says

What does a partick.net meet-up look like?

YesYNot says

With a dildo, MRA pamphlet, or hand gun?

More likely a consent form and video camera, especially if a dildo and alcohol are involved.

rando says

haven't had one in a couple of years. is it time to do it again?

Patrick, where do you usually have these meetups?

Goran_K says

It's alright man. I used to be a "regular" on Pat net, I'd say the "golden age" of the Bear vs Bull battle.

I remember you. Good job on 'cashing out. Couldn't have happened to a nicer guy. Shoot me a msg if there's an empty farm next to yours when you find it.

junkmail says

I remember you. Good job on 'cashing out. Couldn't have happened to a nicer guy. Shoot me a msg if there's an empty farm next to yours when you find it.

Are you sure you're ready for the Northern Nevada lifestyle?

- No more done up plastic Cali babes
- Not a lot of night life
- No Oceans (but there is Lake Tahoe)
- Rural
- Cold winters

I tried it for a few weeks during the extremes of the Summer and Winter, and I'm okay with it. It's definitely not "Cali" weather though.

Hey Goran, I like the choice - Carson city, NV. Close to Tahoe. Still close to Bay Area. Can you tell us more on out why you chose this place?

And what were some other places you considered?

Ironworker says

Hey Goran, I like the choice - Carson city, NV. Close to Tahoe. Still close to Bay Area. Can you tell us more on out why you chose this place?

Well my requirements for a home out of state revolved around a few main criteria.

- Not heavily populated (more people more problems from what I've seen in my life)
- Low cost of living (so no urban centers of commerce)
- Weather could not be too extreme (didn't have to be California pleasant, but not Antarctica or Mojave either). I want to be able to go outside and enjoy it at least 80% of the year. I'm an avid long distance biker, I do about two 40 mile rides per month, and I also like to run about 10 miles per week.
- Conservative/Libertarian leanings politically. I've lived next to leftist pretty much my whole life (San Francisco, Los Angeles, Hong Kong, etc), and I'm done with it. I don't need local government telling me that I can't drink soda (I love coke), I can't smoke cigarettes, or I can't eat fois gras, or I can't own a rifle because some Islamic extremist shot someone using a long gun. I don't want to be taxed into oblivion to support entitlement programs for illegal aliens, nor do I want to politicians mismanaging any tax dollars I give them so they can satisfy their voting bloc. I just find government is generally horrible at regulating anything, and I want them in my life as little as possible. So that left California and New York off my list.

So with that all in line, my short list ended up being:
- Flagstaff, Arizona
- Gardnerville, Nevada (suburb of Carson City)
- Dripping Springs, Texas

Gardnerville ended up winning out because of the amount of great, cheap properties to buy and it hit every requirement on my list. The people were friendly, and even though the amount of social activities is limited in the Reno-Carson City metro, it's not like it's hicksville either. There's a pub/art district area in Reno that is actually pretty pleasant to visit for those Friday nights out with the wife.

Flagstaff was really nice, and a close second. But the housing prices over there are a bit more pricey, not California pricey, but climbing because people are realizing how awesome it is out there. The weather is mild, especially for what most people think of Arizona, and the amount of outdoor places to explore was excellent during my time there. I almost pulled the trigger on a place out there and who knows, I may yet still...

Dripping Springs was also very cool, but in all honesty, a little more humid than I would have preferred. Also Dripping Springs was almost "too conservative" for me, the local convenience store sold shirts with faith verses on them, and NRA themed hats. I'm more of a center-right libertarian, so too far left or too far right tend to turn me off. I wish there was a "leave me the fuck alone" party, which I guess is supposed to be the libertarian party, but I digress.

I will say California had better restaurant choices than all three of the places I chose. The food taste better, it's fresher, and I actually enjoyed going out to eat in California. In Gardnerville, or Flagstaff, the choices and most importantly flavors are not up to snuff IMHO. But I cook a lot of my own food now days anyway, so that wasn't as important a factor for me.

So that's what went through my mind when I decided I wanted out of California.

Goran_K says

I wish there was a "leave me the fuck alone" party

Goran, you and I seem to be pretty similarly aligned. I've never considered myself to be a conservative libertarian, but I guess that would be the appropriate label.

And how in the world did you settle on those three cities? Is there city version of a ETF/mutual-fund finder out there somewhere :-)

Goran_K says

I've lived next to leftist pretty much my whole life (San Francisco, Los Angeles, Hong Kong, etc), and I'm done with it. I don't need local government telling me that I can't drink soda (I love coke), I can't smoke cigarettes, or I can't eat fois gras, or I can't own a rifle because some Islamic extremist shot someone using a long gun. I don't want to be taxed into oblivion to support entitlement programs for illegal aliens, nor do I want to politicians mismanaging any tax dollars I give them so they can satisfy their voting bloc. I just find government is generally horrible at regulating anything, and I want them in my life as little as possible.

Spot on! I've been living in metro CA (SF or LA) nearly all my life and more and more I ask myself, why do I put up with the congestion, the anger, the population density, the cost of living, and just move to the mountains?

I'm in my mid 30s but expect that sentiment to only grow.

BayArea says

Goran, you and I seem to be pretty similarly aligned. I've never considered myself to be a conservative libertarian, but I guess that would be the appropriate label.

And how in the world did you settle on those three cities? Is there city version of a ETF/mutual-fund finder out there somewhere :-)

Here's something you might like. I took one of those political alignment test on Facebook. You have to answer 50 questions (more if you want), but it basically shows what your political alignment is, and here's what I got.

As you can see I'm pretty center-right with slight libertarian leanings. I do believe government has a role for the country obviously (national defense, infrastructure), but in the end I want to maximize autonomy and freedom of choice. I think gay people should go and get married (or whatever they want to call it), I support people being able to buy weed and smoking it. I also believe I should be able to own an AR15 if I am a law abiding citizen with no criminal or negative mental health record. But I'm digressing.

As for those 3 cities, I started by making a short list of states that generally fit my criteria, then I whittled them down one by one. When I got to 3-4 states where I could see myself living, then I started looking for cities within those states. It ended up being a really involved process that took weeks of research and internet forum reading.

BayArea says

Spot on! I've been living in metro CA (SF or LA) nearly all my life and more and more I ask myself, why do I put up with the congestion, the anger, the population density, the cost of living, and just move to the mountains?

I'm in my mid 30s but expect that sentiment to only grow.

Those are some good questions, and questions I asked myself as well. The business tax burden in California is extremely high, the individual tax burden is high. There are too many people, and housing cost are astronomical at the moment. Personally, I like to stretch my arms once in a while and not offend anyone's safe space.

Congrats, Goran. Well done.

Between the real estate investment choices, your approach to finding your political standing, and the methodology you followed in finding your current city, I am thoroughly entertained and even somewhat envious of you lol (and I say that 100% respectfully)

May I ask how old you are and what you did for a living to allow you to purchase your Laguna/LA properties in the first place?

Thank you Goran for braking it up for us. Great strategy! Are you from former Yugoslavia - Croatia, Slovenia. My favorite tennis player ever was Goran Ivanisevic.

Meeting would be interesting and maybe even fun with a glass of wine.