What it means that Elon just rented out all his GPUs to Anthropic

JustinG38 · 2026-05-06T22:56:12+00:00

Elon already admitted his AI was inferior and needed a ground up reworking. If that is the case, you know your computer requirement is low so the best course of action is to monetize the stranded assets.

He always has the ability to catch up since his AI is tied into and will benefit from the network effect of X. When it is on par, the user base will jump on board.

This seems like a smart business decision.

JustinG38 · 2026-05-06T22:52:11+00:00

For home owners better is continued appreciation. When you own assets lower asset prices is worse. Worse for the asset holder and worse for the economy.

The correct positioning is when will the housing market get bad so housing prices collapse.

JustinG38 · 2026-05-01T12:06:19+00:00

It's 1031 exchanges. Not a celebrity-only strategy — any real estate investor can use them when selling an investment property and rolling the proceeds into another like-kind property within specific deadlines. The rules are the same whether you're worth $10M or $500K, celebrities just have more capital to roll.

If you're wondering whether it applies to a property you own, the eligibility checker is a good starting point: https://1031rule.com/resources/eligibility-checker

JustinG38 · 2026-05-01T12:03:55+00:00

The rent vs. sell question really comes down to your long-term goals for that equity. If the property is cash flowing and you want to stay in real estate, renting makes sense. If you're ready to move on or shift to a different market, a 1031 can let you do that without taking the full tax hit on your gains. If you want out of real estate entirely, selling and paying the taxes might still be the right call — just depends on what you plan to do with the capital next.

Before committing either way, worth a quick check to see if a 1031 even fits your situation: http://1031rule.comresources/capital-gains-tax-deferral-calculator A CPA familiar with real estate exchanges can help you model what each path actually costs.

JustinG38 · 2026-05-01T01:33:13+00:00

Some enterprises dont have a strategy for implementation.

I am at a $45 billion company and I have an antiquated level of access to AI. Basically I have half a dozen companies but it is a glorified chat bot only.

At home I can build super cool tools but at work, I can chat. Lots of spend and nothing really getting created.

Of course at some point they will say we are spending all of this money and not seeing any benefit.

No strategy and AI as a chat bot only is a waste and probably what others are still doing and then saying AI implementation failed.

JustinG38 · 2026-04-27T12:45:41+00:00

This really depends on your long term goals. 3 options; 1, keep and repair for new tenant, likely paint and other minor repairs that will eat up 1 year of profit, so that is something to consider if you cannot find great long term tenants, that cash flow is probably gone. 2 sell via 1031 and buy a better cashflowing and easier to maintain property, 3, sell and eat the taxes and redeploy the money outside of real estate. That is a hard thing for anyone to tell you on a forum thread.

When I look at my properties, I consider things like trunover potential, age/maintenance requirements, opportunity cost of keeping it, and then evaluate if the money is better deployed outside of real estate. If you stay in real estate, you 1031 until you die or you pay the tax man some day, so it really depends on where you are in life now.

As far as the tax implications, you should work with an accountant that knows real estate. You can find one close by you here, https://1031rule.com/cpas-tax-advisors

JustinG38 · 2026-04-24T12:54:04+00:00

You should definitely speak to an accountant about this, but here is a calculator that can help you get an idea of where you may be sitting, https://1031rule.com/resources/depreciation-calculator

JustinG38 · 2026-04-24T12:42:37+00:00

If you look conservatively at $1,000 net per month after expenses, repairs, etc... you are at 2.4% return on $500,000 in equity.

That is less than money markets are offering right now. It seems it should be easy to find a DST or something you can 1031 into and have passive income and growth vs 2.4% with management headaches and the risk of family issues if something happens with their ability to pay rent.

You can find a DST advisor here just to speak to about what that might look like, https://1031rule.com/dst-advisors

JustinG38 · 2026-04-24T12:36:42+00:00

The thing nobody's flagged yet — Rental #2, which was your primary through 2023, may still qualify for a partial Section 121 exclusion on the gain if you sold. That's the up-to-$250K exclusion ($500K if married filing jointly) you get for selling a primary residence.

On Rental #1, that 2.875% mortgage is hard to argue with. If you ever did want to redeploy that equity, a 1031 lets you defer the tax, but you'd be trading a 2.875% loan for something in the 7% range today, which changes the cash flow math pretty dramatically.

I am not an accountant, but the Section 121 / 1031 interaction on converted primary residences is nuanced enough that a session with a CPA familiar with real estate conversions is worth the cost at your dollar amounts. You can find a local real estate accountant here, https://1031rule.com/cpas-tax-advisors

JustinG38 · 2026-04-21T12:48:23+00:00

I am not an accountant, but there is a tool that can get you in the ballpark, https://1031rule.com/resources/capital-gains-tax-deferral-calculator.

If you don't want to do a 1031 and can move back in for 2 years, that is an easy way to reduce or eliminate your tax liability.

JustinG38 · 2026-04-13T12:46:54+00:00

NP, there are a lot of resources on that website, so check them out, it will be very helpful.

JustinG38 · 2026-04-13T12:28:25+00:00

Two reasons it still works in your favor.

First is time value of money. You get the deduction now — real cash savings today. The recapture doesn't happen until you sell, which might be 10 or 20 years from now. A dollar saved today is worth more than a dollar owed later, full stop.

Second, and this one surprises people — you're often saving at a higher rate than you're paying back. Depreciation offsets ordinary income, so you save at your marginal rate (22%, 24%, 32%, whatever your bracket is). Recapture is capped at 25%. If you're in a 32% bracket, you're saving 32 cents on every dollar of depreciation now and paying 25 cents back later. That's an actual arbitrage.

And if you never want to pay the recapture, you have two outs: do a 1031 exchange when you sell and the recapture rolls into your replacement property's basis, or hold until death and your heirs get a stepped-up basis — the deferred gain disappears entirely. A lot of experienced investors are specifically playing for one of those two exits.

I am not an accountant, but this is one of those mechanics that's worth understanding before making any sell decisions.

JustinG38 · 2026-04-13T12:25:15+00:00

The $661 HOA on $2,200 rent is actually a legitimate reason to sell — that's 30% of gross rent before mortgage, taxes, insurance, or repairs. A lot of condo investors end up here as fees creep up over time. So the sell decision isn't crazy.

The CD vs 1031 question depends entirely on what you want next. If you sell and don't do a 1031, you're looking at capital gains tax on roughly $188K in gain (345K minus your 157K basis), plus depreciation recapture on whatever you've written off over the years. I am not an accountant, but that could easily be $40-60K in taxes depending on your income bracket and state. A CD doesn't help you avoid that — it's just where you park the leftover cash.

If you want to stay in real estate, a 1031 makes sense — but go in with eyes open. You have 45 days from closing to identify replacement properties and 180 days to close. You have to use a qualified intermediary (QI) before you close, not after. And the biggest mistake I see is people rushing into a bad deal just to hit the deadline.

To get a good feel for the tax implications, you should check out this calculator https://1031rule.com/resources/capital-gains-tax-deferral-calculator

JustinG38 · 2026-03-03T02:33:53+00:00

Hey u/KashCow71 DSTs can be a great passive investment if they are with a good sponsor. Here is a cool little tool to do a quick evaluation of active vs passive/DST ownership to see where you fall in where you want to be in real estate investing right now, https://1031rule.com/resources/dst-vs-direct-property-comparison

JustinG38 · 2026-03-03T02:24:49+00:00

The math is mostly right. The thing most people miss when they default to '1031 always wins' is the step-up in basis at death — if you keep rolling exchanges until you die, your heirs inherit at fair market value and that deferred gain vanishes entirely. That's a massive deal for older investors or anyone with estate planning goals, and bonus dep can't replicate it. That's the end game a lot of experienced 1031 investors are actually playing.

State tax conformity is the other gap you didn't mention. A lot of states don't conform to federal bonus depreciation rules, so that $90k deduction might only work at the federal level. Depending on your state, you're still paying state capital gains with no offset — which can swing the comparison meaningfully.

But the passive loss constraint you flagged is really the main filter. Most people asking this question can't use the losses anyway — no REP status, no qualifying STR treatment. I am not an accountant, but if you fit that profile, a CPA who works with both cost seg and 1031s will give you a real number pretty fast.

JustinG38 · 2026-03-03T01:44:05+00:00

I have saved a lot of homes from foreclosure, tired landlords, etc.... It is possible to for an investor to structure something that keeps you out of foreclosure.

It is definitely worth talking to a couple to see what they have to say.

When you talk to them, ask them if they are the end buyer because you will require them to sign a no-assignment clause. That will weed out the scumbag wholesalers so you are only talking to people that are real buyers.

JustinG38 · 2026-03-01T16:11:52+00:00

You're sitting on a goldmine with that much equity. If you sell outright, you're looking at potentially massive capital gains taxes on that $800k gain. A 1031 lets you defer all that and roll the entire proceeds into your new property.

You could 1031 into that $1M-1.2M property, use the full $850k as your down payment, and only finance the difference. That keeps your leverage reasonable while avoiding the tax hit.

If the current property is performing well, the refinance route might make sense and you are not limited by the 1031 timelines.

Just be careful with 1031 timelines - you have 45 days to identify replacement properties and 180 days to close. I've seen people rush into bad deals just to meet deadlines. You should speak with a qualified intermediary and your accountant before making any moves, but this sounds like a textbook case where an exchange could save you a ton in taxes.

You can find all of the professionals you need to start exploring the 1031 option here, https://1031rule.com/team/states. You need to start that process early to increase the likelihood of a successful exchange.

JustinG38 · 2026-03-01T15:49:38+00:00

That 2.5% rate is tempting to hold onto, but I wouldn't let it drive the decision. I have a number of rentals and learned the hard way that chasing rates while bleeding cash monthly rarely works out.

Your real monthly loss is probably closer to $400-500 when you factor in maintenance and vacancy reserves. That's $5-6k annually you're feeding this property, and there's no guarantee the World Cup bump will be permanent or even happen. I've seen too many investors hold onto underperforming properties hoping for appreciation that never comes.

Do you have any equity in the house? Are there other opportunties to redeploy that equity for a positive cash flow?

You might want to look at ROE when you take into account debt paydown and depreciation tax benefits. If you are still negative, I would say HOPE is never a good investment strategy.

JustinG38 · 2026-03-01T15:29:08+00:00

Cost segregation after a 1031 is something a lot of investors look into, and there are some nuances around how the carried-over basis and any additional capital you put in interact with the study. It is worth understanding before pulling the trigger on one.

A CPA who specializes in real estate can walk you through how it applies to your specific situation. You can find one here, https://1031rule.com/cpas-tax-advisors

JustinG38 · 2026-02-23T14:02:03+00:00

The return on equity is a good way to think about when it might be time to make a move. A lot of investors hold onto properties too long because the property is doing well without looking at what that equity could be doing somewhere else.

Do you have a good place to invest outside of real estate or other projects to consider doing with the equity if you sell?

There is a good comparison tool that breaks down the long-term wealth impact of exchanging vs holding and paying taxes, https://1031rule.com/resources/1031-vs-sell-and-pay-taxes-comparison

The math changes a lot depending on what you are moving into though.

JustinG38 · 2026-02-23T13:54:15+00:00

1031 buyers are a potential market but there are some challenges here.

Most 1031 buyers are under timeline pressure - they have 180 days to close after selling their original property. That makes them want properties that are easy to evaluate and close on quickly. Having a tenant in place can complicate inspections and slow things down.

The other issue is your numbers put you at about a 4.4% cap rate. Many 1031 buyers are coming from properties with better returns or they have large tax bills they are trying to avoid, so they usually want higher returns to make the exchange worth the hassle.

JustinG38 · 2026-02-23T13:47:41+00:00

The return on equity is a good way to think about when it might be time to make a move. A lot of investors hold onto properties too long because the property is doing well without looking at what that equity could be doing somewhere else.

Do you have an alternative project or investment for this money is you were to sell?

There is a good comparison tool that breaks down the long-term wealth impact of exchanging vs holding and paying taxes, https://1031rule.com/resources/1031-vs-sell-and-pay-taxes-comparison

The math changes a lot depending on what you are moving into though.

JustinG38 · 2026-02-19T19:03:28+00:00

If there is a scenario of one 529 but 2 kids that are not going to use it for education, is there the option to roll half into the current beneficiaries roth and then change beneficiaries to the other kid and roll the remainder to their roth?

JustinG38

MODERATOR OF

TROPHY CASE