All Forum Posts by: Ben Feder

If you're renting you'll also need a solid lease agreement. Rehabbing you'll probably need permits. Definitely find yourself a good attorney they can guide you through a lot of those processes

When you find a good real estate attorney, will they be able to help you navigate through the whole REI process?

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How much do you need to know about the REI process before diving in? On one side, I feel like if you don't know enough then you'll be investing without proper knowledge/won't be prepared, but on the other side, I feel there comes a point where you just need to take action or you won't ever make any deals. What is that point where you need to draw a line and say, "I've learned enough. I can start investing now." (and obviously continue to build upon your knowledge at that point)

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What are all the documents/pieces of paper needed from beginning to end of the real estate investing process? From the time you start searching for a property, to negotiations, to the time you close the deal, to rehabbing, fixing, renting to tenants, selling, etc., what are all the documents/pieces of paper needed, and at what point are they needed at (what are the documents for)?

This question sprang to me when watching the BP webinar "Maximize Profits by Optimizing Your Rehab & Controlling Your Costs", and the fact that REI is basically "1. People, 2. Number, and 3. Pieces of Paper". What are all the "pieces of paper" needed throughout the whole REI process? Thanks for all the advice and information!

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@Mike D'Arrigo thanks for the advice! Makes sense to me.

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@James Wise thanks for the advice.

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Hi Bigger Pockets community!

I would just like to introduce myself... I'm a new investor from the Philadelphia area living in Warrington, which is about 10 minutes outside Doylestown. I am fairly new to BP, having joined a couple years back but recently started diving more into action in the past few weeks or so. I'd like to connect with other investors near me. Please introduce yourself. Also, please tell me about any REI club meetings near me or REIAs. Looking forward to building a collaborative relationship!

Regards,

Ben Feder

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Originally posted by @Dassi Lazar:

@Ben Feder

I look at my SFR as a multi. If you have a multi you don't have the option of separate LLCs per unit. Yes, by having separate LLCs you have less liability but it also costs at least $300 a year per LLC. It adds up quickly do reduce liability.

With that being said one of the beauties of SFR is that you can take the best of both worlds. I limit my LLCs to 10 property per LLC.

Disclaimer: I am not a lawyer, for any legal advise speak to your lawyer.

When I am talking about separate LLCs I meant for each property, not each unit. Do you do SFR flips or BRRRR or other strategy?

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Originally posted by @Michael Skoczylas:

Originally posted by @Ben Feder:

Originally posted by @Michael Skoczylas:

I am of the opinion that each property has its own LLC. If you have a partner, then have one LLC which you guys own together (a partnership for tax purposes) own all of the LLC's as single member LLC's/Disregarded Entities. Then you have one tax return- for multiple properties while still shielding your other properties liabilities from each other and you. As far as 1031 goes- its the ultimate taxpayer- you if they are disregarded entities, or the partnership if you go the partner route I described above that has to do the exchange- not the LLC that owns the property.

Isn't a "disregarded entity" an entity with a single owner recognized for tax purposes, which is an entity not separate from its owner? How does one form a disregarded entity, and how would that be helpful liability-wise? Wouldn't a disregarded entity not be an LLC and therefore expose the owner to liability? Maybe I am confused on what a disregarded entity is.

Ben, you are correct. A disregarded entity is an LLC (not a corporation) which has a single owner and is not recognized for tax purposes unless the owner choses to have it recognized. However, tax purposes and legal liability purposes are very different. The LLC which is disregarded, but yet is treated as an entity unto itself, meaning you don't treat it as your own wallet, will provide proper legal liability.

You got the theory right, just mixed up that tax and legal liability are two different animals, and can see the same item in different ways.

So how would an LLC be formed if I am going into it with a partner, since I can't create a disregarded entity?

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Originally posted by @Michael Skoczylas:

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Originally posted by @Ned Carey:

Originally posted by @Ben Feder:

I have been doing this a long time. i have always tried to study the law and regulations as it relates to my business. I don't recommend doing self help legal work in the beginning but some things become quite repetitive.

Nolo Press has some very good books on the law. I have at least 2 on LLCs. By reading and studying the law you will be better informed when working with an attorney and you will recognize when there are some things you can do yourself.

In Maryland there is a very helpful site. State Dept. of Assessments and Taxation. It has a lot of information about property ownership and businesses.

I know that lifelong/careerlong learning is great to keep improving, but at some point I know I have to get started. How do you suggest breaking into investing with not much legal knowledge on REI? I am thinking using a lawyer would be a good idea, but do you think investing with only basic knowledge on REI is a bad idea?

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All Forum Posts by: Ben Feder

Ben Feder has started 51 posts and replied 170 times.

Post: What are all the documents/pieces of paper needed?

Post: How much should you learn before you make your first investment?

Post: What are all the documents/pieces of paper needed?

Post: Is it profitable to buy real estate that needs no improvement?

Post: Where do you find good multifamily commercial deals? (apartment)

Post: Newbie, Warrington, PA outside Philly, PLEASE INTRODUCE YOURSELF

Post: Should I form a different LLC for each property I invest in?

Post: Should I form a different LLC for each property I invest in?

Post: Should I form a different LLC for each property I invest in?

Post: Should I structure a business entity for my large MF real estate?