All Forum Posts by: Aaron Smith

@Nick Barlow money printing is fantastic for all assets, including stocks and real estate. It’s the people without assets that get screwed. Problem is, what happens when the fed can’t lower interest rates anymore and can’t print anymore dollar with hyperinflation. But just kick that can down the road!

If my rents from my properties have gone down and/or stayed vacant for a long time, I wonder if that be financial hardship?

I am currently working with the owner of a large mobile home park, and he would like to sell, but is worried about tax implications specifically due to the fact that he holds the property in a trust and changed the property corporation structure from a C corp to an S corp one and half years ago. I did a little research and found out:

"It should be noted that trusts can also take advantage of the tax benefits of S Corps, which is beneficial for estate planning and asset protection purposes.

Sale of appreciated property. If an S Corp that was formerly a C Corp sells appreciated property within 5 years of converting to an S Corp, it must pay additional tax on any appreciation in the property value which took place prior to the S Corp election. This is known as a built in gain tax and is paid in addition to the tax paid by the S Corp shareholders on the total gain for the sale. However, if the corporation waits 5 years after converting to an S Corp to sell the property, no separate built in gain tax applies. Instead, the gains on the sale of property are taxed only once to the shareholder, and can then be distributed by the S Corp tax free to the shareholders"

Since we would be looking for him to sell us the property now and not in three and a half years, we are looking to help the seller by quantifying this additional tax burden so he can make a more informed decision.

Does anyone have a good CPA who specializes in real estate that they would recommend to help me with quantifying this tax burden?

@Joseph Parker I did give him a call and talked with him briefly and passed on his information to my investor partner. Thanks for passing along his info! It will definitely give my investor partner some good options.

I wanted to share with the BP community a method which has been working very well for me regarding showings. I live 30 min from the rentals that my brother and I own (8 units total), which makes showings a huge pain. Its much easier for someone that lives there to do the showings, so what we've done is use showing automation software, Tenant Turner, to automate the process. I pay one of the tenants $20 per showing and $10 per no show (for their time). Tenant Turner does all of the work: marketing the property, gathering peoples information, scheduling showings, giving current tenants 24 hr notice by email or text, following up email with a link to the online application and requesting feedback - and then the tenant who helps me with shows does the rest of the work, and all she has to do is set her availability on the Tenant Turner calendar and do showings. Zero communication with prospective tenant leads is needed, and we get plenty of showings. I still have to arrange unit turnover, cleaning, repairs, but that's not too bad. Tenant Turner is just one of these services, there is showmemojo, and some others. For me, this system takes the worst aspects of property management off my plate, and is pretty nice.

Anyone else who is in a similar situation, give this a shot, its definitely cheaper than hiring a property manager, but takes a lot of the hassle out of self management.

Hi BP Community!

Looking for a triple net lease property broker in the St Louis area. I have an investor partner looking to do a 1031 exchange into something, and I think a NNN lease would work well for his purposes. I appreciate any references you can give. Thanks! @Joshua Smith

-Aaron

Hi BP Community!

Looking for a triple net lease property broker in the St Louis area. I have an investor partner looking to do a 1031 exchange into something, and I think a NNN lease would work well for his purposes. I appreciate any references you can give. Thanks! @Joshua Smith

-Aaron

I am currently in an EMD dispute and I wont get into the specifics, but one thing I am not sure about is if the seller is allowed to get the property under contract with a new buyer before my EMD has been released. The contract was declared null and void, so it would seem like a new contract could be made, but wanted to make sure.

I'm thinking about doing this, any thoughts?

For Monthly Cash Flow Distributions:

First, 100% to the investors until the investors have received an 8% IRR

Second, 70% to the investors and 30% to the Manager until the investors have received a 15% IRR

Third, 50% to the investors and 50% to the manager

For Capital Events (Refinance or Sale):

First, 100% to the investors until the investors have received an amount equal to their capital contributions.

Second, 100% to the investors until the investors have received an 8% IRR

Third, 70% to the investors and 30% to the Manager until the investors have received a 15% IRR

Fourth, 50% to the investors and 50% to the manager

After a Refinance:

On unreturned investor capital for both cash distributions and at subsequent capital events:

Structure shall remain the same.

On returned investor capital, for both cash distributions and subsequent capital events:

First, 40% to the investors and 60% to the Manager

@Joshua Smith

@Bryan Richard We just got approved last week, so we should be getting our first home in about 2 months, with delivery and backlog and all that. 

Earlier you mentioned that you couldn't do the CASH program in your market because new homes are too expensive. A good benchmark that Frank Rolfe uses is that the cost to rent a 2-bedroom apartment should be the same or greater than the cost of lot rent plus the monthly mortgage payment on a newer large 16x80 mobile home. If that is true, then you should be able to use the CASH program in that market, for new or newish used homes. Rentometer.com will get you the average 2-bedroom apartment rents in your area.