All Forum Posts by: Chris Oswald

Thanks for the insight.  Very much like the idea of the S-corp election, it is something I current do with a different business and makes perfect sense.

Before I start I will definitely be talking to a CPA about this, just want to make sure I am not going into the conversation blind and have good questions to ask.

To start with everything will be run through an LLC and I do know any profit is taxed as pass through income. The goal is to minimize the tax and maximize my ability to continue to increase investments.

For profit realized from a flip, if I rolled the profit into the next property do I still have to pay tax or is that deferred, similar to when realizing appreciation on a primary residence upon sale?

If I roll all profit from rents received into another property will I have to pay tax on the gains?

Is there a time limit for either?

Just trying to keep as much in my pocket as possible.

Thanks!

@Account Closed, thanks for the insight. On my counter offer, I just wanted to be able to specifically point out why the value is less than the asking price.  Don't get me wrong, I have no plan to buy an overpriced property. I would rather buy nothing at all than pay an inflated price.

I agree, I need to see exactly how he got to his NOI number as it seems to be a bit inflated.

Thanks @Account Closed. I think that cap rate they based the sales price on is appropriate, I am thinking they may have left some keep expenses out to make it a bit better though.

Thanks @Daria B.

I might have to look into that book.  Thanks for the advice.

I looking at a property and the owner lists it at a 12% cap rate.  I did my math and the real number is closer to 8%.  The property is class B or C. I am new to this, but it isn't prime and isn't terrible either.

When calculating cap rate do you include cap ex., property management, vacancy rate, maintenance and repairs and all other operating expenses?  Just want to make sure I am understanding the numbers right.

Thanks @Mark Nolan

Yes I did understand that, but thank you for reiterating.

@Chris Soignier

Thanks, learning a lot of new aspects. 

Not sure if this is the right way to look at it, but my plan is to purchase rental properties on leverage and grow the account to be able to take personal loans to purchase properties which I would be more actively involved in.  In essence I would like to become my own hard money lender - with being capped at the $50k loan amount.

Thanks @Brian Eastman. So I guess paying myself as the property management company is out. I am assuming there are set up costs associated with this, do you have approximate figures for that and the continuing maintenance costs?

I have looked into the self directed IRA and solo 401k and feel the later is a great option for me (yes I am self employed). I am curious about the timeline to have funds from previous employer retirement plans and an IRA transferred and available for re-investment.

Also, does all of the revenue go back to the 401k or am I am to be paid market rates for managing properties?

Thanks!