All Forum Posts by: Andrea O.

@Megan Caplan Can you share details about your Eldersburg lot or PM me?

@Thomas Franklin I expect a contractor to add a reasonable mark up to products procured for a customer’s project.  This is why vendors offer contractors a discount.  In no way is this dishonest or illegal.  Contractors have time and accounting costs relating to purchasing and running receipts through the business.  They need to deal with damages and missing pieces and returns.  No one realizes the time, hassle, and responsibility of dealing with material purchasing until they manage a project.

@Hoang Bui In my experience, there is no contractor worth hiring that likes paperwork or who has the time to provide an itemized proposal.  Gathering a few quotes has you did for identical scope of work is the best way to assess whether pricing is fair.  Good luck!

@John MaynardI bought a commercial building under the name of a separate LLC and got a little reduction in the interest rate since I planned it to be owner-occupied. I rent out half to a retail tenant and my professional service business rents half, so the RE LLC receives a check each month (market rent) from my primary business just like it would in any landlord-tenant relationship. My thought is that I don't want to subsidize my business with reduced rent just because I own the building. My business needs to be a quality tenant that produces cash flow for the RE company. Sharing the building with another tenant is a huge help. I also rent out parking in the back. Maybe get creative and think about how the RE would cash flow with or without the bakery. Good luck!

@Dan Schweit I found my first deal on the MLS. It was listed for about a year and I noticed another price drop, a drop that put it well below comps. I put in an offer about 20% lower, was countered, and then gave the sellers my best and final offer. To my amazement, they accepted. For the longest time, I tried to figure out why the property didn't sell. Thought maybe the house was haunted or maybe something happed there, but nope. Turns out that timing is everything. The sellers were just ready to move on with their lives. The listing had become stale and everyone in town assumed there was something major wrong with it, but it was really in great shape. I spruced up the front and added parking, very valuable in this location. Now it's cash flowing and I have my first buy and hold for long term. I'm sure this strategy of finding motivated sellers on the MLS is too slow for most investors, but for me, I'm only looking to pick up a rental every few years, so I don't think it's a bad place to start. Just get out there and start making offers. You never know what might happen. Good luck!

@Bryan Gambina  I'd love to know the contractors who quoted you these numbers.  Framing and HVAC seem reasonable in the market we're in today.  Siding, driveway and of course landscaping are crazy.  You don't have to be a licensed contractor to hire subs directly or get a fair price.  Get out there and meet people.  Ask around, visit a Highs in the morning or a Burger King at lunch.  Introduce yourself when the guys get out of their truck.  Visit new construction sites and talk to people.  Knowing some Spanish helps.  I learned this from my husband who is a roofing and siding contractor.  This is how he finds subs and this is how property managers find him.  I just finished a renovation on the Eastern Shore and didn't know that many trades in the area.  The building is on a main street in town and has a porch.  I sat out on the porch a few Saturdays for a few hours and called numbers on the sides of the trucks that went by.  I figured that if guys were working on the weekend, they must have some work ethic (a good start).  If they answered the phone and turned around the truck to meet with me, they must have a decent level of responsiveness and urgency (even better).  I found my painter, landscaper and a laborer this way.  I already had my electrician, carpenter, and plumber... just needed a mason.  For that, I asked the nice guy at the brickyard who he recommends for a small job.  Try being creative.  In general, stay away from any one who advertises, is award winning, or sends out a salesmen to quote your job.  This should narrow your search.  Good luck!

Hi Jonathan,

What's the purpose of your business plan?  Are you seeking private financing or a business partner?  As a new investor or for any new business owner, you'll need to define your goals, develop your strategy, and project out your finances yourself.  You should be able to get help from a non-profit center that focuses on supporting start-up entrepreneurs in your community.  Do you have an accountant that can help?  Writing a business plan even if it's just in outline format is a valuable exercise for the business owner to get clarity and analyze numbers for profitability and cash flow.  If someone needs an expert to write it for them, they're really not ready yet to risk capital and start a business.  Get more comfortable with all aspects of your market and your RE strategy.  Then you can think through and write your own plan on a napkin in an hour and be successful in business.  Those are just my thoughts based on my experience.  Best of luck!!

@Linda Weygant@Steven Hamilton II  Thank you so much!  That's what I'll do.  I appreciate your help.

@Steven Hamilton II@Lance Lvovsky  Thank you so much for replying.  How does the IRS know the entitiy doesn't have income or expenses to warrant a return?  Will not filing result in a notice or fine?  Thank you!

Hi everyone. I'm hoping to get some guidance from tax professionals in the BP community since I'm a bit stuck. I'm working on my 1065 for a two-member LLC. We established the entity and purchased our first property in July 2018. The renovations are now complete and we'll be putting the building into service this month.

I sought the help of a CPA.  He told me not to file at all since we had no income and the IRS wouldn't be happy if we claimed deductions without rental income.  I'm worried about not filing at all, so I'll at least file and generate K-1s with all zeros.

Questions:  

Should I claim startup costs and the costs to establish the entity, but not the cost to acquire the property for 2018?

What about money I paid to contractors?  The entity issued 1099s.  Is it a problem if I include the 2018 1099 payments on the 2019 return as part of the capital improvements put into service in 2019?  

It seems strange to hold 2018 expenses and not report them until next year, but is this correct in order to match them to revenue?  If so, in doing so, would the entity still be filing using cash-based accounting?

Thank you so much for your help!  

@Greg Foley congratulations getting started and best of luck working your financial freedom plan!