All Forum Posts by: Chris K.

@Michael Plaks

But you don’t know his situation. He asked if it’s "possible." Reasonable experts could say "yes" or "no" based on what he shared. From what I’ve seen, no one said, "Go ahead, bro. You’re totally fine." Everyone has said, "go talk to a professional," because that’s the only real advice any professional on BP can give. 

My issue with your specific post is that it sets up a strawman and takes a personal shot at other posters. To be clear, I think you’re a great poster, and you share good advice. But you don’t know much about the original poster—just like everyone else here. That’s why you told him to talk to a professional. The same goes for me and other folks who lean towards "yes." 

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.

@Michael Plaks

I’m not sure if you’re just trying to be controversial, but it’s clear everyone agrees this requires careful planning with a qualified professional. I don' think anyone is suggesting that simply managing these 9 properties is enough. However, having a high-income earner with a spouse willing to qualify as a real estate professional is a well-documented strategy to save significantly on income taxes. Instead, you’re attacking a strawman and questioning the knowledge/character of others.

@Samuel Kim: As I mentioned in my first post, speak with a qualified professional. I say this to folks all the time on BP, but no lawyer/CPA can give you meaningful advice on a public forum like BP. No one here is going to ask you to publicly share your income as a physician or dive into all the specifics required to give meaningful guidance. What I can say is that many physician + spouse combos have successfully done this and survived audits. 

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.

@Jonathan Ludizaca

It really depends on the market. If you are in the Wilkes-Barre/Scranton market, you used to be able to get duplexes for $50k to $100k and make it cash flow quickly. Last time I checked, the prices did go up. But I think they may still beat SFR in terms of cash flow there.

What you really need to think about is the exit. How long are you going to own it and when will you try to sell it? A lot of your returns come at the time of sale. 

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.

@Samuel Kim

Short answer is "yes." I have worked with many medical professionals where they adopted the basic strategy you are trying to use. Really the main challenge is going to be making sure that your wife understands what she needs to do to document her hours and activities. As others said, becoming a licensed realtor is helpful as when it comes to filling up the hours. 

Just note that you guys may end up in what I call the "1031 exchange until you both die" cycle. It's a way many medical professional + spouse combo have saved a lot of money on taxes. But it is a serious commitment. 

But do talk to a CPA/tax professional who has done this. There will likely be some hand holding in the beginning. Also assuming your practice is going well, consider talking to asset protection attorneys. Depending on your practice size and income level, you may just want to start with maxing out 401k and also adopting a defined benefit plan before committing to becoming a lifelong real estate investor.  

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.

@Diego L.

That's a loaded question that is difficult to answer on a public forum. If you are only looking to create a trust to avoid probate, you could probably hire an attorney to make a revocable trust. But there are bunch of factors to consider there. 

I would just add that probate isn't really a painful process in most situations. I would probably work with an attorney in North Carolina (or wherever you live) to do some estate planning since you do have young kids. That may or may not involve a trust. 

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.

@Audrey Fisch

@Chris Seveney is correct. But ultimately it depends on the comfort level of the attorney in question. Feel free to shoot a PM and I can try to see if I can make an introduction.

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.

Aside from what everyone else wrote, note that adding units require various steps that you may not have considered (e.g., adding a new street address with USPS, etc.). You may want to work with an experienced contractor and/or other experts who have done this in the past.

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.

@Bart Tilly

There are various "standard" agreements available in the marketplace (e.g. AIA, ConsensusDOCS, etc.). Assuming you have an architect, my guess is that they will lean towards using the AIA docs. They will likely have the ability to generate them.

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. 

@Anthony Vaganos

I haven't checked this in a long time. But either Freddie or Fannie (or maybe both?) issued guidance saying that you can use LLCs if you get approved to do so. I want to say the guidance was issued around 2021. Check with your lender to make sure you heard it correctly. 

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.

@Arif Gungorur

Make sure you check any HOA or development restrictions. Had a client who thought he had a deal of a lifetime. He checked everything but the HOA/development restrictions. Long story short, he ended up buying a worthless piece of land.

Not saying this is always the case. But properties typically end up in the repository list for a reason. Finding a deal on that list is challenging. 

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.