All Forum Posts by: BENJAMIN KELLY

Born and raised in NE Ohio, i have owned my own insurance agency for the past 10 years.  After seeing what my customers were doing with rentals, rehabs, and property management, I thought I would give a try.  I enjoy the real estate so much, I decided to start investing in homes in Portage and Summit Counties.  Currently I have 4 single family dwellings as rentals, 3 commercial office buildings, and am working on rehabbing two more homes.  

I have learned a tremendous amount of information from a good friend of mine that has been doing real estate transactions for over 10 years.  I really enjoy investing and meeting new people along the way.

Real Estate is a part time business for me.  My plan is to rehab and flip 4-5 homes per year.  I have a full time job as an insurance agent where I am a partner in an S Corp.  My paycheck puts me in the 30% tax bracket.  

Currently I am investing my properties in a sole member LLC where the income is passed directly through to my 1040 (taxed at 30%). If I sell a property with 120 days, I am then taxed at my effective tax rate of 30%. In my opinion, this is harsh.

I have heard or done research that a C Corp may be better for me to invest my rehabs in.  The effective tax rate (capital gain) would be at 15%, I would plan on taking W2 income as an employee. 

My problem is that I am trying to reduce my overall personal tax rate, limit the amount of information a lender may have with obtaining a loan or line of credit, and reducing my liability exposure when it comes to protecting my personal assets.  I realize I am going to have to pay the tax, I am just trying to figure out a better way to do.

Any help would be appreciated as my counsel and CPA are trying to work together to find the ultimate solution.

Thank you

I forgot to mention the basement walls are constructed of Terra Cotta tiles not cinder block.  The grinding method would probably just the reduce the blades to nothing pretty quick.  Any other suggestions?  I have attached photos of the exterior vegetation that we intend to remove.

Thanks a lot for the advice.  I want to try the least expensive option first.  I will give it a whirl.  Thank you again...

Hey Mike...  I know you... You sold my first house in Cuyahoga Falls for me...  Anyway, I will take some interior and exterior photos.  If you want to take a look at it, you have my number and personal email.

Ben K.

I bought a rehab house about a month ago.  Contractor starting performing the work replacing the HVAC units, tearing the plaster from three of the walls, electrical wiring being moved, and the laundry being moved back to the basement.  House when completed with have all new mechanicals, updated wiring, updated plumbing, new windows, new floor coverings, and new coat of paint.

One issue (if anyone has any ideas I open for the ideas): In the basement we are scheduled to do interior basement waterproofing including new sump drain.  A few days ago it rained really hard and my HVAC contractor installing the new furnace, noticed a 1/4-3/8" crack on the south foundation wall.  Water was more than trickling in.  We plan on removing the vegetation from the south wall which includes overgrown bushes, shrubs and a few misc trees.  How would you fix the issue for little or no money?  i.e.  Caulk the wall; cement the wall; or dig the outer foundation, seal it with a membrane, tar it, then fill back in the dirt?

It is only leaking on the south side of home.  Basement waterproofing on the entire foundation outside will eat into my potential profit three fold.  I think I can handle doing the DIY myself (renting mini excavator and doing the membrane myself), but the physical labor may be too much for one guy to handle.  What can you suggest might be a  more cost effective fix?

The project is scheduled to be done by the end of September 2014.

Project located in Cuyahoga Falls, OH.

Thanks for reading.