All Forum Posts by: Beau Fannon

And you have financing that will fund an LLC with no seasoning? Please let me know who that is!

Generally Accepted Accounting Principals would beg to differ with you. 

 https://www.accountingtools.com/articles/accountin...

Your CPA is speaking from a tax filing perspective which takes places after year end. That's not the same as managerial accounting which is what is in question here. 

There are a few expediting options out there but the fees kill me. It's not worth it to save 2 days. Far easier to move loan payment dates.

Just do it in your name for now. 4 units isn't worth the hassle of transferring title to an LLC and since you probably don't even have an LLC at this moment you'd be creating more financial headaches than you'd alleviate. Go ahead and start an LLC that manages your properties so it can begin the seasoning process. But don't bother transferring property titles to it yet.

Are are you willing to pay an expediting fee up to 3%?

 Think about it.  You are accepting rent you haven't earned yet.  So if you accept 12 months rent in the current month, you can only count 1 month's worth toward your revenues.  The remaining 11 months are booked to an unearned revenues account which is a liability account. You'll need to deposit the 11 months unearned rent to an escrow/savings account separate from your operating account and make transfers every month you earn the rent.  This requires more cumbersome accounting operations in your books.  That looks terrible on your books if you need to acquire financing and your books are reviewed. And what happens if the tenant is able to successfully break the lease?  

Nope, nope, nope.  It's an accounting liability and gums up your books.  Also, my experience is that many people who try to pay in advance are worried about future money issues.  I always followup my refusal to accept future rent with an automatic withdrawal option provided by my rent collection platform.

Considering that CodeNext went down in very expensive flames, I doubt anyone on the council is willing to invest their political capital into restarting the process.  It's easier for them to just ram through a new city ordinance and paint the state legislature as the bad guys when it gets overturned. 

It took the state a year to overturn the ride-share fingerprint ordinance Austin enacted. If the city made such a push, its likely to take as long or longer to overturn. A year is a sizable chunk of the development cycle so such a hypothetical city ordinance could put the kibosh on many new projects. 

 The Oregon law provides a 15 year grace period for new construction. I'd bet this was done to assuage the concern of developers and counterpoint the issues highlighted in your Business Insider article.