All Forum Posts by: Account Closed

If you can find a lender who will do a 30 year loan on a rental property, please share!

Your LLC would need to be elected to be taxed as a corporation (C or S) for you to be able to issue yourself a w2 salary. A partnership or a traditional LLC structure typically does not allow equity partners to also be treated as employees. Check with your CPA and attorney, but I'm pretty sure this is the case.

As far as the bank requirements, I'm not sure if a W2 from yourself from a business that hasn't been open for more than two years is going to matter. You're probably going to have to wait for the two year mark no matter which way you slice it.

I'm not a lawyer, but I'm pretty sure the mixing of funds to pierce the veil is about paying for strictly personal things with business money out of the account such as paying your personal mortgage, buying your friends beer, out of the LLC account.

I don't think buying something for the business with personal cash then getting reimbursed for it (if it's a legitimate business purchase) from the LLC is going to run a risk. You may want to double check that with a lawyer.

Just pay your cell phone bill as you normally would and write off 60-75% of it off as a business expense under the LLC. If you want to save on the paperwork just keep a schedule in excel for all the cell phone bills and cut yourself a reimbursment check at the end of each quarter for whatever % you select as business use. If you stay below 75% claimed as a business expense, you shouldn't flag any auditors. That's what I would do.

K.I.S.S. method is key. Don't overcomplicate things. Focus on building your business and leave the tedious tasks to your bookkeeper or accountant. I've seen a lot of people get so hung up in procedural things that they never get out and complete a deal.

Good luck!

I've got a pretty solid understanding of how to structure a syndication as far as the entity goes and running the accounting and tax side of it would be right up my alley and interest level. I also think I could navigate around (with the help of an attorney) the SEC rules for investor solicitation to stay legal. What I'm not sure of is how to develop investor confidence when I don't have a track record of previous syndications. It's a catch-22 almost.

I am fortunate enough to know a local guy who has done syndications for years to acquire shopping malls, hotels, you name it. He has been extremely successful in this and maybe I could work an arrangement where he takes a major chunk of my fees on my first syndication in exchange for holding my hand through it and allowing me access to his investor network. This would allow me to gain experience on putting together and running a syndication, working with investors and developing my system to maintain investor relations, handle all the tax side of it, and most importantly develop a documented track record of providing investors a good return.

Thoughts?

Hello everyone,

I'm a 23 year old accountant (soon to be CPA) working at a local accounting firm. I've always had a fascination with real estate investing and know I'm ultimately going to get into the game.

I like to start things with the end in mind and ultimately (way down the road) I want to have many cashflowing commercial properties with a few million dollars in equity.

For all the big players here in commercial, how did you start? Did you start with residential SFR's, Multifamily, etc and roll those into bigger deals or did you just straight up start in commercial real estate?

I'm thinking I'd like to end up with retail and office space, some storage units, and hotels in my portfolio.

If you had to do it all over again, what would be your path?

Thanks,

Daniel

IMO, if the banks agree to sell a property at short sale to buyer one at a certain price, what difference does it make if buyer 1 sells it to buyer 2 for a profit?

If the banks are unhappy with buyer 1's price, don't accept the short sale offer. If they are happy, then don't worry about what buyer 1 does with the property.

I understand in some circumstances there can be influence by parties involved, but the reality of the situation is the bank fully accepted buyer 1's offer....what buyer 1 does with the property, whether he keeps it or sells it for a 'profit' is not of the banks concern once they accept buyer 1's offer.

If you sell your car to a guy and after negotiation you agree to a sales price of $5000 and the guy turns around and sells it to a prearranged buyer for $6500, is it fraud that the guy didn't bring his buyer directly to you? No. You were happy with the $5000 offer and accepted it. If you want the $6500 offer, reject the $5000 and keep on holding the property...watch the costs add up...

You've got two separate issues here.

1. You have an installment sale that you have been (should have been) recognizing income on for the last 3 years (interest income + gain % of the installment payments). The gain percentage you should have been recognizing over the last three years is under the assumption that the installment sale would be completed in full and you receiving the entire sales price agreed upon. There is a calculation to determine the gain (or loss) on the repossessed property.

This link seems to have some good explanations. Look under real property.

http://www.irs.gov/publications/p537/ar02.html#en_US_2010_publink1000221736

2. I'm not positive off the top of my head, but I would think since you have technically sold the property when you did the installment agreement, if you repossess it now and the property is back in your name and you sell it immediately that would be Short Term Capital Gain....I'm not 100% on this though.

You really need to meet with a local CPA so he/she can look at your entire picture and determine what is best for you.

Take Care and good luck!

Daniel

I typically lean toward higher deductibles to lower the premiums. The way I see it is I would rather pony up the money AFTER the problem has occurred through the form of a higher deductible, than pay for it BEFORE it happens (because it may not!) in the form of higher premiums.

In my head, this is shifting some of the risk to the insurance company. I'll pay when I make a claim, not along the way in the form of a higher premium.

Granted, there is a balancing point, if say adding $1000 to your deductible only drops your premium by $10 a month, then you need to look at it in the mindset that you have to go 100 months without a claim to "win" on this scenario.

Somethign to think about. Hope this makes sense, not sure if I explained it well!

Basically the gain is only the amount in excess of the original cost of the property. If you replace the property with similar property within the alloted time, you won't have to recognize the gain until the sale of the asset later down the road.

Should you choose not to replace the property and keep insurance proceeds, the gain, or loss(if any) will be taxable income during the year it was realized.

The rest has to do with when to recognize the gain or loss on your tax return.

Also, you will need to show on your tax return whether you are replacing, not replacing, or whether the time slot has expired.