All Forum Posts by: Daniel Mills

Hi Guys,

I am wondering what locals think of Waco as a place to invest. A read some posts from a few years ago which seemed to conclude that it didn’t have a lot of the fundamentals necessary for a good market. But, there have been a couple of things that have peaked my attention: 

1. The popularity of the show “Fixer Upper”

2. Tim Ferris mentioning in his BP appearance that he felt that high prices in Austin would push people to Waco.

3. The head of a major turnkey operator in Dallas/Huston I think on Kathy Fetke’s podcast saying that he thinks it’s almost the end for the markets he works in because the prices are getting too high, but Waco might be an area he moves next.

4. Just saw news that AT&T is releasing its new 5G service to Atlanta, Dallas and Waco. 

If only Elon Musk would build a hyperloop...

What do you think? Any local market specialists out there?

@Ryan Cox - when you say "domestic do you mean US institutions that will lend on Japanese properties or Japanese institutions lending on properties in Japan?

@Kiley N. - I was at a real estate seminar with a guy from the UK who was looking to buy properties in Japan. He was a pretty high net worth individual. He said that he could get financing from a Japanese bank even though he had no income in Japan but he had to put at least 50% down. 

Have you looked at some of the big banks like SMBC? I am not sure of their criteria but maybe they loan to non-residents. SMBC Loans

I have turn keys in Birmingham and Memphis as well as a handful of properties I bought the traditional way in other states. I have 4 properties in Memphis with MidSouth homebuyers - my mom has two - and I can’t say enough good things about the experience. I bought the first one in 2015 and I still have the same tenant, I believe. They cash flow really well, 20%-30% cash on cash return, and the best part has been how communicative they are through the process. If a tenant doesn’t pay or is short or there is an expense I immediately get an email explaining the situation and what’s being done. In the case of repairs I usually received video or pictures. With my other property management I have to see the expense or shortage on my monthly report and then ask them what happened. Now, the negative is that they are dealing in properties from the $60-80 grand range. This hasn’t presented a problem for me with tenants because they pick good pockets and manage well but I think it would be tough to off load to a retail buyer. And, recently, they have been having real trouble getting inventory. I would add them to your list just in case.

HI Guys,

I'm closing on a property in Allen, TX pretty soon and I was wondering if anyone had a property inspector they could recommend in the area.

Thanks,

Daniel

Thanks for the answers guys. Unfortunately, @Jerry W. as a permanently resident of japan and a US citizen I have to obey the tax laws of both countries. Here in japan my wife will have to pay estate taxes on anything over $1.5 million, which is around where I am. Also, Japanese law doesn’t not allow me to transfer more than $10,000 to her name in one year without a gift tax. I also believe there is a restriction in the US because she isn’t a US citizen. This, unfortunately, is the issue I face with estate planning. Virtually no US CPAs and attorneys understand the Japanese side and vise versa. I think Hawaiian will be my best bet to find someone who will. This is all good info to think about though. Thanks.

Hi Guys,

So I heard back from my attorney. It seems there was some confusion. They do recommend an LLC for rental properties, but had forgot about my unique situation and the fact that we had agreed to do the estate plan first with a living trust while we checked theJapanese tax repercussions of forming the LLCs. So, they said it is ok to move the properties into the LLC to avoid probate for my wife, but if I choose to do the LLC later, I will have to move the properties out of the trust first. Luckily, I am going to Hawaii next month, so I can check with a tax professional who is knowledgable with both US and Japanese real estate.

Thanks for your input. It has given me some ideas for the future.

Daniel

Thanks for the response guys. The lawyer didn’t suggest to put my personal property (house) in an LLC, she said I should put it in the trust. But, I don’t own a personal residence in the US. My home is in Japan, so this advice was basically nonsense. What the lawyer said was that I can’t put my rental properties, which are located in the US, in the trust. Unfortunately, I can’t do the LLC option making my wife a member because she is not a US citizen and from what my CPA in Japan and the US told me, there would be negative tax repercussions for doing so. This is the issue I’m facing. I can’t just follow the normal advice in the US because I have to file taxes in Japan and the US. I was just trying to find out if anyone knew if there was a reason I can’t put my rental properties in the living trust.

Hi @Bill F. ,

Thanks for your reply. Sorry, I didn't clarify. All of my rental properties are in the US. I own 8 SFHs in several states. My personal residence is in Japan. I am not a Japanese citizen but I am a permanent resident and there are no restrictions on non-Japanese owning real estate here.

Basically, I just did an estate plan through this firm. I decided not to form the LLCs because I wanted to make sure they wouldn't affect my Japanese tax situation. I was told by the firm, that in the meantime, I should form a living trust and transfer all of my US assets into it to avoid probate if I died. Today, I emailed them asking how I go about transferring my assets into the living trust and they said, "You can't put your rental properties in the living trust." Doesn't that mean, if I die, my properties would have to go through the probate process for my wife to inherit? 

Hi guys,

I feel like I have been taken, but I am not sure what to do. I went to a big name real estate attorney regarding asset protection and estate planning. I was advised to put all of my properties into LLCs and to form a living trust and move all my assets in there. I decided to wait on the LLCs because there are so many different arguments here about whether or not they are necessary. But, I did the living trust. It cost me $3,500 plus a few $100 in notary fees. Now, I am getting ready to transfer my property in and they said, "oh no you don't put rental property in an LLC, only a personal residence." My personal residence is in Japan! I can't put that in my US living trust.

Is this true? Is there a reason I can't put my rental properties in a trust? I asked them as well but I haven't heard back.

Any advice?

Thanks,

Daniel

Hi guys,

Thanks. This is great information. Let me ask you this. Say I decide I want to make a really "safe" investment in Birmingham where one street doesn't make or break the deal. What area would you recommend? Is that more of the south in Pelham, Hoover, and Helena? If so, is there much rental demand down there or are people mostly buyers?

Thanks,

Daniel