All Forum Posts by: Ganesh S.

Thanks Joel Owens for your reply!

1. What type of triple net property do you own?? Bank, pharmacy, auto store, dollar store, restaurant etc.

Its retail stores.

2. Is the property held by a national corporate tenant, and franchisee, or is this a local mom and pop type property??

Its rented by mom and pop stores.

The reason I ask this is who funded the loan determines options with paying off the loan. Depending on asset class in triple net you have non-recourse versus recourse loans depending on how much you put down and what type of NNN or who is guaranteeing the lease. There are usually pre-pay penalties in effect as well for paying off early on some NNN loans. These penalties can be very hefty and make it not make sense unless you wait so many years into the primary lease to pay off.

It was funded by Wellsfargo. And they are okay with me paying off and luckily there are no prepayment penalties as well. Agree some of those prepayment penalties can be pretty high..

Steven Hamilton II Thanks again!

Appreciate your timely help!
-GS

Steven Hamilton II. First off all thanks for your quick response!

I am still a bit confused, please bear with me. Let me try to clarify again. I am not sure, if I need the expense of creating/maintaining another new LLC "B".

For e.g. Currently "LLC A" owns the property and owes the bank a mortgage. Cant I just pay off the mortgage and let "LLC A" own the property outright? This way I avoid having to create a new LLC as well as I would have the protection of LLC with my existing LLC.

I am not sure creating a new "LLC B" under my name and paying a mortgage payment to "LLC B" makes any difference as there are no tax advantages.

Could you please clarify your note on the "quit claim" as to which LLC does the quit-claim? And also if there are advantages to pay myself ("LLC B ") a "mortgage" payment?

Thanks again!
GS

Hi Everyone,

I am paying off a mortgage for a NNN property that I have bought using LLC name A. My attorney is indicating that it may be better to first create a new LLC B where all my funds would be deposited first and then pay off the bank.

LLC B would also be under my name. LLC A can pay a mortgage to LLC every month, but since both are held in my name I dont see any tax advantages.. Correct me if I am wrong.

Are there any advantages of creating a new LLC just for paying off? Or is it possible just use an Escrow account and pay off the loan while still holding the property under LLC A.

Any advice/comments?

Thanks
GS

Thanks Xing Zhu for your perspective!

GS

Welcome to BP Henry!

I myself joined recently and it is a great place to exchange ideas and learn.

Though I am not local to NC, I am definitely interested in both Charlotte/Triangle area as it provides better opportunities than SF/Bay area for e.g.

Xing Zhu If rental is cash flowing pretty well, wouldn't appreciation be more a bonus? :) Or is it that Triangle area you are not seeing enough cash-flow to account for expenses to be profitable in the long run?

Cheers
GS

Some notables from experience:

1. Relying on property management to ensure credit worthiness of tenant.
2. Being lenient on tenant instead of enforcing lease.
3. Enforcing - eviction notices sent much later that allowed tenant to squeeze in more free months of rent.

Cheers
GS

Tom C. Thanks for your reply.

This investment is not in a retirement account. It is all paid off using after tax money. I am having a bit of tough time refinancing, partially because I am not living in US full time anymore. I will continue to look for avenues of refinancing to get some money out.

However if there is a way to take the 50K - depreciation (12k) and use that to fund a solo 401k, that is another option I would like to consider. Especially being remote I am not able to refinance so easily...

Thanks
GS

Hi Everyone!

I am so glad to have found this website! Its great to see all the discussions and strategies used by successful investors :)

I am an software engineer by the day and dabble with real estate in the night over the last few years. Initially started out with SFH flip, but now much more comfortable with NNN retail investing. I also do real estate investments overseas primarily in India, with land development and buy/hold properties. Though I am an US citizen, I do end up spending a lot of time in India these days.

I also have some questions on Solo 401k, on whether income generated by my LLC could be sheltered using a new Solo 401k or not? Basically, within a month I would be outright owning a property which can produce around 40-50K income per year, but property would only show around 12K depreciation. If I allow this income to pass through to me, it would greatly reduce my returns. I am trying to see if there are ways to contribute this income towards a tax sheltered account that I could use for real estate investment purposes. Note I did not buy this property through a self directed IRA, as none of my IRAs had that much of cash :)

Thanks!
G S

Joel Owens, Brandon Turner, Xing Zhu Thanks for your warm welcome.

@Joel - I currently own retail condos in Charlotte that yield a bit above 10%. It has been pretty good so far with less mgmt over the last few years. However once in a while (once in 3-4 years) things need to be closely monitored due to a non-paying tenant, lease negotiations, refinance etc.

I will post to the tax sub-forum to see if I can Get Charles/Steven to answer. Thanks for the pointers!

Thanks
GS