All Forum Posts by: Alfred Litton

So, newbie question here. Hypothetical situation: I have an LLC that owns 3 sfh properties, and the NOI for the year is $20,000. Do I HAVE to pay the taxes on that $20,000 if I choose to keep it in the LLC and, for example, reinvest it in the purchase of another property? I don't need the income at present. I'd rather "let the profits ride" and keep adding to the LLC with my own income for now. Do I have to pull the NOI out, pay the tax, and then put it back in each year? Guidance appreciated on this one!

So my wife and I created an LLC with an EIN and are about to fund a company bank account with our savings. It's a multi-member LLC, and I know we have to pay taxes on the profits (minus allowable deductions for the business), but how are the taxes paid? If we don't want to withdraw any of the profits but, instead, want to use all the profit each year to buy more properties, do we still need to pay taxes on the profits? If so, how do we do that without drawing out money from the company? We want our nest egg to grow! (I should add that we do not borrow money, so it will take a couple of years' worth of profit to save up to buy another property.)

Since I'm paying cash and will have no mortgages, sounds like about 6-9 months gross rent should cover it, I guess.

I am taking a $240,000 inheritance and purchasing properties in the next several months.  How much of that should I hold in reserve? Some of the properties may not yet have renters.  The area, though, has fairly strong rental demand.  What initial or early expenses should I anticipate within the first months of purchase (assuming I do all rehab at the time of purchase, so that they are rent-ready).  What's a safe reserve?

@Anthony Dooley No offense, but one reason I HAVEN'T bought the property yet is because I'm well aware that I still need to learn a few things, and that's sort of why I'm here. I'm checking out properties, contacting PMs, asking questions, etc.  I've read quite widely, but I realize that's not enough. I'm just looking to find out the best possible source I can use to estimate potential rent for a property that's never been rented before.  I don't think it's fair to state that "You obviously have no idea what you are doing."  I'm just not 100% there yet. Hence, my decision to post this in the "Investor Basics" section.

@Agus Hartono  Yes, I wondered whether sitting down with a good local PM might give us the sort of information we need. They might give a more unbiased perspective in some regards. Good advice. Thanks.

I'm still trying to get to know professionals in the area.  Nearest rentals from what I can see are several blocks away in a city of about 75000 people.  

I'm about to buy my first SFH, but the home has not been a rental property before. I want to make sure I don't overpay, so I understand that I need to know how much the property could rent for. My question is, how do I determine that with a reasonable degree of accuracy? What sources should I be looking at?