All Forum Posts by: Carlos O Gomez

Thanks for clarifying!

I was paying $500 for W-2 wages, 1099s for stock investments and income from 3 rental properties.  But now the Tax preparation company wants to charge me $150 per rental property, raising my costs to $950!  I plan on buying another rental and it really doesn't make sense to have to factor in $150 in annual expenses (now that returns aren't tax deductible).  So I ask...are other investors out there paying an additional fee for your return each time you add a property?  If so, how much are you being charged per property?  Imagine someone who has 20 properties at this rate.  That'd be $3,000 just for the rental units and nothing else!  

Have your wife reach Rich Dad, Poor Dad by R. Kiyosaki.  That should wake her up!  What she wants is a sure recipe to the Rat race.  House, kids, life struggles, death!  Is that what she wants?  House hack or buy a rental first in a cheaper market out of state, like the south.  Continue to rent and save money in your area.  You will improve your debt to income with rental income showing on your tax returns two years in a row so that bank financing will be easier subsequently.  The first is the hardest.  Good luck.

I agree with Ashish Acharya. You don't need to set-up an LLC to get started on building your rental portfolio. In fact, it will simply cost you time and money yearly when this should be put to buy more assets. If you're scared of your personal liability, make sure you have an umbrella coverage for each property with at least 1 million in coverage. That's what I have with my three Tenessee rental properties. An LLC is taxed like sole proprietor anyways, so tax benefits are the same. Now that my wife is a realtor (licensed last month), we may put her realty business and our rentals together and incorporate, but even still, she has coverage for malpractice through her broker, Keller Williams. When I went to a real estate investing 2-day training, way back in 2006, it was recommended to do an LLC to house three rentals at a time. Some people go crazy and want an LLC for each property! Also keep in mind that Trump's tax benefits are going away for LLC types (last I read), and will continue to benefit C-corp structures. SO if you can turn your venture into a business that involves holding units, managing them, and working as a realtor with multiple people (employees), you should go C-corp route, but not until you're bigger. House hacking is how I got started too! I bought from turnkey property wholesalers/company. I'm doing it again this year for my 4th rental, another residential property, via out of state investing. I live in CA. Good luck!