All Forum Posts by: AJ Smith

I recently stumbled upon an extremely run down home (foundation, roof, siding, mold, etc.) single family home on a nice lot in a high end neighborhood. At first glance, it appears the current home may be beyond repair / it would be better to just tear it down and rebuild. This is not my first deal, I am a moderately experienced investor ($2M in assets portfolio of buy and hold) and have taken on some major rehabs in the past so i feel as though i have a solid grasp on the basics (numbers, financing, permits, working with contractors etc.) I would like to live in the property for two years then sell in order to capture the tax benefits. 

I know that live-in flips are a popular strategy but i am wondering if anyone has experience/advice on building a spec home, living in it for two years, and selling. Curious about cost PSF to build (thinking a high-end, ~5,000 sq ft, 5 bed, 5 bath home), best practices for finding a builder, working with the city, writing off building / rehab costs from a tax perspective while living in the home, etc. 

Any thoughts / opinions / comments would be greatly appreciated! 

Hi

I have recently been searching through the internet and forums to find a snow removal services for a rental property. I havent had any luck with referrals or what I've found, either not receiving an answer or that service isnt available in my area even though in in a highly populated location. Would greatly appreciate any help, referrals or being pointed in the right direction!

@Scott Smith

Thank you Scott for the great input. I believe if I set up an anonymous trust to act as the owner of the series LLC (which would act as the operator) I would have anonymity. Am I off base on this?

I was also curious from a tax perspective, would each child LLC report it's own net profit and loss? Or do I need to combine each of the children and report the total net profit/loss of the parent series LLC?

I was thinking either Delaware or Texas for the series LLC.

I have been reading as much as I can on series LLCs and was looking for some clarity around them. For context, I own a handful of rental properties and also work a W2 job. I am thinking a Delaware series LLC would be the best way to hold my rental properties. i'll outline how i believe using a series LLC will impact liability and taxes. Hoping this can provide clarity to others and hoping more experienced users can pick apart / call out where i am wrong.

I will open a Delaware series LLC that will have a single tax ID, paying a single fee to start & annually.

I will open a child LLC for each rental property I own.

- will the series LLC provide anonymity ?

- will i be able to separate out each of the properties from a tax perspective? or will i need to roll all of them together and take the gain/loss of the portfolio as a whole?

- the titles of each property will be transferred to the child series within the parent series LLC.

- child LLC / property A will be protected from a lawsuit filed against child LLC / property B

- i will pay taxes only in the state in which i operate the properties, not in Delaware. I will only pay the fees required to set up the series LLC to the state of Delaware.

@Ashish Acharya

Or am I looking at this the wrong way - if I were to payment self a 15k salary and contribute 15k to a solo 401k, would my effective tax on this be 0? From the solo 401k deduction decreasing my taxable income to 0

@Ashish Acharya

Makes sense. Thank you for the input. I'm guessing after accounting for the SE taxes I would need to pay, it wouldnt be all that beneficial then.

I have done some searching on solo 401k eligibility, I have a couple main questions. For context, i own several small multifamily units that i self manage without employees and am interested in tapping into the tax incentives of a solo 401k. Looking for some clarity / understand on if/where I'm wrong:

1. Rental real estate is considered a passive activity, therefore I would not qualify for a solo 401k.

2. I am my own property manager for these properties, so if I were to pay myself a market rate salary for this, I could use that salary to open and fund a solo 401k. For example, say I were to pay myself a salary of 15k annually for property management, I could contribute this 15k to a solo 401k and decrease my overall taxable income by 15k? I also have a W2 income and contribute to an employer sponsored plan, but from what I've read I can still qualify for a solo 401k for the part time property management

I am closing on a multifamily property next month, i am planning on living in one of the units during the month of June to do an extensive rehab on the unit. I would like to lease the unit to new tenants starting July 1st. 

I am wondering when i should plan to market the property for rent - I wont have the renovations complete to show the property until about mid-June, and this would be a very quick turnaround to find a tenant by July 1st. Obviously, i would like to minimize the vacancy as much as i can. If anyone has encountered this situation or has any tips please let me know!

I am looking to renovate a bathroom as a part of my BRRR strategy. I would like to lay porcelain floor tile, but when I took out the old linoleum flooring I found hardwood floors underneath. I know it's not recommended to lay tiles over hardwood, so I am wondering what my options are for putting in new floors? I would like to put in tile floors but I dont know what I would need to do with the subfloor - would I need to rip out the hardwood and lay some other kind of subfoor?