All Forum Posts by: Chris K.

@Andrew Hejtmanek

Talk to your attorney and CPA. On the legal end, lawyers can get this done in many ways. Maybe the LLC can hire your partner as a 1099 property manager. You can also get really detailed and complex in the operating agreement. But there's a good amount of nuance on the tax side.

If you cannot fall asleep, here's a good summary of the issues 😇

Payments to LLC members for services 

Disclaimer: While I’m a licensed attorney, I’m not your attorney. What I wrote above does not create an attorney/client relationship between us. I wrote the above for informational purposes. Do not rely on it for legal advice. Always consult with your attorney before you rely on the above information.

@James McGovern

That's tough. There are probably several "macro" answers to your question, but not many at the "average" investor level.

One common thing I see these days is younger professionals living together. Two friends of mine each make around $200k. And yet they share a 3BR apartment. 

With fewer kids and fewer marriages, this might be the new normal.

Disclaimer: While I’m a licensed attorney, I’m not your attorney. What I wrote above does not create an attorney/client relationship between us. I wrote the above for informational purposes. Do not rely on it for legal advice. Always consult with your attorney before you rely on the above information.

Adding to the two posts above—it is hard to get any meaningful development projects done without relying on HOAs or other planned developments. Short version of the story is that developers have to deal with tons of regulations like stormwater, open-space, private streets, and so on. For one reason or another, laws evolved so these structures became an easy choice: developers can squeeze more units into smaller areas and meet those requirements by utilizing common spaces. Municipalities like this setup since HOAs cover a lot of the costs—it's basically "free" property taxes.

My guess is that your social media analysis reflects this gap. You could make a reasonable argument that these communities offer benefit to the resident as well. But reality is that most people don't care about a lot of this urban planning issues. And the net result of everything is that developers and municipalities can dump a lot of future headaches onto HOAs, which pass them right to owners. 

Disclaimer: While I’m a licensed attorney, I’m not your attorney. What I wrote above does not create an attorney/client relationship between us. I wrote the above for informational purposes. Do not rely on it for legal advice. Always consult with your attorney before you rely on the above information.

@Chris Seveney

Interesting topic. In my experience, the main benefit of a Delaware LLC is the depth of caselaw. That matters because in many states, the honest answer to common membership disputes is "we have no idea."

For example, a client of mine had real concerns about successor liability in a given transaction. Delaware has clear cases on point. In other states, it's not even clear whether courts would recognize the claim, let alone how they'd apply the law. If you're on the plaintiff side, you can drag things out in jurisdictions where the answer isn't settled. For clients, that means more time and money spent litigating.

You see this difference in available resources. For example, many lawyers use Practical Law, a paid repository written by very expensive attorneys. A search for “Limited Liability Company” gives over 300 hits for Delaware, New York, California, Illinois, and Texas. Other jurisdictions may only have less than 30. 

Does this matter for "most" real estate investors? Probably not. But for sophisticated parties, caselaw certainty is a big deal.

For what it's worth, I would typically say most real estate investor should probably just open an LLC in the state they operate.

Disclaimer: While I’m a licensed attorney, I’m not your attorney. What I wrote above does not create an attorney/client relationship between us. I wrote the above for informational purposes. Do not rely on it for legal advice. Always consult with your attorney before you rely on the above information.

My two cents: the biggest mistake I've seen over the years working with ultra-high-net-worth families is that they stay involved in daily decisions. Take the Sacklers. Granted, that’s a very complicated situation. But it certainly didn't help that family members made key operational decisions including getting involved in the aggressive marketing of OxyContin. 

The reality is that the more actively involved you are in investments or businesses, the greater your risk of personal liability. To use an absurd example, imagine owning shares in a public corporation. No one will try to hold you liable if the corporation does something dumb (unless you hold enough shares to control decisions and actually took part in the dumb decision). In contrast, if you own your business or investments and sign everything yourself, making those decisions directly exposes you to liability.

This is not to say there is no benefit to owning real estate using LLCs. But it is also not a magic solution to personal liability. 

Disclaimer: While I’m a licensed attorney, I’m not your attorney. What I wrote above does not create an attorney/client relationship between us. I wrote the above for informational purposes. Do not rely on it for legal advice. Always consult with your attorney before you rely on the above information. 

@Sylvia Castellanos

If privacy is paramount, you could use a trust. But it sort of defeats the purpose if you sign the documents as a trustee. This means you'll need a trustee willing to sign documents for you. Some financial institutions provide this service, but typically only with large assets. They often charge fees based on asset size.

You could hire an attorney as trustee. But most charge hourly, and many decline due to liability beyond standard malpractice.

"Nominee agent" services also exist but carry risks. Many people dealt with scams. And things quickly get messy if you pick someone unqualified.

Bottom line: this level of privacy is costly and difficult, especially if you're actively managing investments or businesses. Wealthy individuals achieve it by remaining passive. They let qualified professionals handle daily operations, including document signing. Think of a family business where the family can afford to hire a proper CEO and CFO. Or think of folks who open bank accounts in Switzerland or establish irrevocable trusts in offshore jurisdictions like the Cook Islands. They essentially pay a significant fee to preserve their privacy. 

Disclaimer: While I’m a licensed attorney, I’m not your attorney. What I wrote above does not create an attorney/client relationship between us. I wrote the above for informational purposes. Do not rely on it for legal advice. Always consult with your attorney before you rely on the above information.

I used to live in Luzerne/Lackawanna County and still do a good amount of work there. I'd classify the entire area as a classic 9 to 10 cap market. You won't get much natural appreciation. But many investors have found success there.

Note: The City of Scranton is probably the most difficult regarding local regulations. But it also tends to generate the highest rents among all municipalities in both counties.

Disclaimer: While I’m a licensed attorney, I’m not your attorney. What I wrote above does not create an attorney/client relationship between us. I wrote the above for informational purposes. Do not rely on it for legal advice. Always consult with your attorney before you rely on the above information.

It looks like they're finally doing a county-wide reassessment. They've talked about this for years. Looks like they're now pulling the trigger.

https://www.wnep.com/article/news/local/lackawanna-county/la...

https://www.thetimes-tribune.com/2025/03/28/as-lackawanna-co...

The most important point to keep in mind is that higher assessments don't necessarily mean higher taxes. Many counties, like Lackawanna, have ridiculously low assessments because Pennsylvania's constitution includes the "Uniformity Clause." 

Over the years, this meant that counties couldn't easily reassess the value of real estate. So they instead decided to apply a flat multiplier. You pay taxes based on that. 

This reassessment aims to capture the fair market value of each property, removing the need for multipliers.

Another item to keep in mind is that Pennsylvania law prevents municipalities from using reassessments to raise total tax revenue. Individual property taxes might change. But overall revenue collected by the municipality must stay essentially neutral.

So, to your particular situation, I don't know if you will end up paying more taxes or not. You may want to talk to a lawyer to review them. But just because the total value is higher doesn't mean you will pay more taxes. 

Disclaimer: While I’m a licensed attorney, I’m not your attorney. What I wrote above does not create an attorney/client relationship between us. I wrote the above for informational purposes. Do not rely on it for legal advice. Always consult with your attorney before you rely on the above information.

I also haven't seen the BP lease, so I can't comment.

I haven't reviewed the PAR lease recently, but it's generally fine. A few points:

1. PAR designed the lease to be balanced. Some landlords prefer a more "pro-landlord" form.

2. The PAR lease is meant to be used with other PAR forms. Make sure to get those forms and confirm their versions match. I've seen people mix up PAR forms all the time. 

3. The PAR lease covers many scenarios. That flexibility can make it less user-friendly since you have to fill out a lot of information. Again, I've seen people try to use the PAR forms and then forgot to fill out certain sections. 

4. One advantage is the lease was approved by the PA Attorney General as meeting "Plain English" requirements. That's a plus.

Disclaimer: While I’m a licensed attorney, I’m not your attorney. What I wrote above does not create an attorney/client relationship between us. I wrote the above for informational purposes. Do not rely on it for legal advice. Always consult with your attorney before you rely on the above information. 

@Bate Ilondior

I would reach out to @Ronald Rohde. He's my recommendation for TX deals. :)  

Disclaimer: While I’m a licensed attorney, I’m not your attorney. What I wrote above does not create an attorney/client relationship between us. I wrote the above for informational purposes. Do not rely on it for legal advice. Always consult with your attorney before you rely on the above information.