All Forum Posts by: Dave Hagen

Just as there are bad people, there are good people.

Look over any contracts/agreements. Talk to others in real estate, as to the terms. See if a lawyer friend/family member/church member will glance at anything legal to see if it is boilerplate, or if it contains terms favorable to them and not to you.

Don't be afraid to ask your mentor any questions you have. You can see if it matches other things you have learned from others, show that you are interested and pay attention to details, and can be a better learning experience. Eyes wide open is great for many points.

Real estate isn't just about getting a good price. It's about all the details that affect your bottom line. Are they giving you a good interest rate, compared to what you find from other private or public loans. Are the terms stricter. What are the terms for either side to terminate the loan. Fees involved. Are they just the money, or do they want partial ownership, silent partner. Are they looking to help you find contractors. What happens if you don't use the contractors they supply. Are there kickbacks. Networking helps by finding people who can answer questions. And if it gets back to the mentor, their only response should be that they are happy you are learning and double checking. Just make sure you ask general questions, and not phrase them as if you don't trust your mentor. For instance, you could ask that if you refer a contractor, are there any finder fees, or other benefits, or a better relationship with the contractor. Just make it about your being new and wanting to know how to act.

Best of luck on your career.

Quote from @John Koster:

Quote from @Dave Hagen:

California mandated that the electric companies move to solar and wind, leaving little money for maintenance, then blame the companies when their poorly maintained power lines spark fires. As if power companies need incentive to avoid maintenance before infrastructure fails.

And California has continued reducing forestry maintenance until they have now completely defunded it. The forestry service said that they weren't able to do 10% of the maintenance needed, like clearing out dead undergrowth, making fire breaks, or controlled burns. And  since they are anti-logging, there are no areas being cleared and replanted, or paths created to remote areas, making firefighting even more difficult.

Strange, since cutting down trees for use in products is a great way to capture carbon and make areas available for new growth to capture more carbon. And why do they wait to call in the aircraft that can dump liquids on a fire, until they are out of control? Are they trying to maximize the damage fires cause, so they can blame "Climate Change" for the decisions they make?

Insurance companies are raising prices due to the increases in disasters, then leaving when California and others try to limit their increases. They claim the insurance companies are greedy, but if they don't cover their losses, they will go out of business.

Politics shouldn't invade every aspect of our lives, and it is sad that we need to spend so much time talking about it, but unless we push back, it will continue.

I wonder if California would remain blue, if voter ID was mandated.

Good luck in California, when they finally pass laws that all but prohibit evictions, labeled as renter's rights.

I'm not sure what California's response to a large fire has to do with a question about paying taxes for an out of state rental in a California LLC, but okay.

On topic, most states make LLCs formed inside their jurisdiction pay taxes on out of state rentals. However, some states, such as Illinois, have pass through taxation where the LLC itself does not pay income tax on its earnings. The income is passed through to the LLC's owners and is required to be reported on their individual income tax returns. California has an $800 minimum tax on LLCs which is different from many states. So whether or not you do any business in the LLC, you have to pay $800 every year to keep the LLC active. I'm not sure about the details of the Wyoming Statutory Trust, but I'm pretty sure you still have to pay the $800, because that fee is on the LLC, not on the assets within the LLC.

As for the half-truths & regurgitated right wing propaganda spurred on by the name "California":

- California power companies are subsidized by the government to invest in solar and wind energy.  The mandated ventures into alternative energy is not coming out of their pocket.  There are various programs and incentives to encourage the growth of renewable energy, including financial support for utility-scale solar and wind projects, community solar initiatives, and programs to promote Net Energy Metering.  Between the subsidies and their ever increasing rates, I'm pretty sure that power companies should be able to cover basic maintenance.   

- The California Forestry department (Calfire) is in charge of 31 million acres of privately owned land.  They do not patrol the suburban areas where the most devastating fires occur, because those are suburban neighborhoods and not forests.  The state of California is an enormous area with vast forests.  The Sierra Mountains alone are larger in size than many smaller states, not to mention the San Gabriel, Santa Monica Mountains, etc... To suggest that the Forests  could be maintained better, and then there would be less fire is silly.  I camp regularly in the forests of California.  The roads are well maintained.  The forest floors are mostly unmanageable and follow the natural destruction/rejuvenation patterns of nature.  If you swept a hundred yards of droppings on a forest floor, by the time you got to the 50th yard you would see new droppings behind you.  Do you realize the manpower that would be required to continually "rake the forest floors" as some have suggested?  Seriously?  There are millions of acres to cover.  First of all, that would require taxing and spending, now wouldn't it?   And to suggest that maybe they would be in better shape if the state went Red?  You think the Republicans, the party of limited government, will raise taxes and hire the enormous amount of manpower required to go over every inch of the forests every day?  Get real.  It's funny, there is never any talk about Government incompetence in the news when there are wild fires in Wyoming, Arizona or Montana, states which coincidentally also don't rake their forests, because they, like California, also understand things and perceive reality. 

- Lost in all the finger pointing and political football throwing after the LA fires, was the fact that it hadn't rained in 8 months and the winds in the canyon areas were 70-100 mph.  For those who don't know, LA is dry.  It's basically a desert - kind of an important detail.   After 8 months without rain, the areas in the canyons were one big tinder box.  There was going to be a fire somewhere no matter who was in office.  Why did they wait so long to drop water from the air then?   Well, helicopters don't exactly perform well in high winds and the military planes that carry larger water loads are an hour away, so even if the planes were summoned the second the first fire started, they wouldn't get there in time to prevent a large spreading, and those planes do not perform well in 100mph winds either.   Sorry, I don't think aircraft crashing into the hillside & exploding was the firefighting technique needed at that moment.   Fire professionals agree as well.  Imagine being a hard working fireman who worked his or her *** off for an entire week in life threatening conditions in a drought ridden desert listening or reading something from someone who lives in an area so humid that it's hard to light a grill without 4 ounces of lighter fluid, talking about how he and his coworkers didn't do enough and they let the fire go, because somebody wanted to further a global warming agenda.  Ridiculous.  

"Politics shouldn't invade every aspect of our lives, and it is sad that we need to spend so much time talking about it, but unless we push back, it will continue."   

- ^^^^^ Hiliarious. The guy who goes on an unprovoked diatribe about the democratic leadership in California's response to wild fires responding to a post about LLC tax laws thinks politics shouldn't invade every aspect of our lives. You answered no questions for the original post and then make a laundry list of things Fox News told you to think about.

Tired of reading "California hate" posts on bigger pockets.  I agree, the landlord laws here suck.  And there are many other problems, but with any heavily populated state there will be more problems.  We have more of everything here.   More criminals, more tax cheats, Doctors, Lawyers, janitors etc...  People love to talk about how oppressive the California government is and how difficult it is to do business here.  But, if that's true, why does the state of California have a GDP that is ranked  #5 in the world?

1. U.S

2. China

3. Germany

4. Japan

5. California (if it was a country)

It's true.  Look it up.  The right wing narrative that all these blue states are a bunch of lazy do nothings who just want to sponge off of the government doesn't really align with economic reality does it?   How does a state that is heavily taxed with an oppressive, hard to work with government that is full of lazy do nothings outproduce every state in the country?  Hmm.  Maybe the millionaire "news anchors" on TV that are paid by the billionaires (many of whom are invested in fossil fuels) who own their stations aren't telling the whole story?  No. That couldn't be!  Billionaires always seek the truth at the expense of their own self interest.  Everybody knows that.  Ha.  Ahem.

When I first read the GDP stat I assumed that California's high ranking was because of it's size, but then I looked up GDP per capita and California is routinely ranked in the Top 5 GDP per capita in the country as well.  And as of 2023 the first 6 GDP per capita states/districts were:

1. D.C

2. New York

3. Massachusetts

4. Washington

5. California

6. Connecticut

That's odd, isn't it?  States with heavy taxes & regulations at the top of the list.   If anything, it proves that you can legislate environmental regulations, restrictive workplace safety initiatives and still have a productive workforce.  The two realities are not as mutually exclusive as some would like us to believe.   

One final note - imagine the GDP ranking scores if California wasn't so "burdened" by government?  How much further would it dwarf the productivity of the red states?  The difference would be laughable.  What's the matter red states?  All those tax breaks and you still can't outproduce "Marxist California"?   Sad.  

Be better red states.  Be better.

- Happy investing from a California capitalist!

-

 My comments were in response to several previous posts talking about fires. Read in the thread sequence it was posted may make more sense. Probably doesn't help being listed right after the original post as the most popular response.

Thank you for calling responses right-wing, and responding with left wing talking points.

I didn't make my comments relevant only to the latest fire, but to previous fires that have been going on for days before they called in the big planes. Surely not all of them had high winds that suddenly disappeared and allowed the planes to assist in the fire fighting.

Subsidies rarely completely cover projects, but are incentives to companies to start projects they otherwise would not consider in the best interests of the company. And the part about companies not doing maintenance because there were demands from the state that shifted their resources to renewable projects came from the companies when the state tried to blame them for the forest fires.

Take your pick who is telling the truth, but California has kept reducing the money available for forestry work, and it is the forestry service that says it must do far more work at fire prevention than the current budget allows. Maybe labeling everything "right wing" has kept you from hearing from sources that may know more than the propagandists. Why are forest fires burning out of control, destroying houses and killing people, where liberals are in charge, and love to blame global warming that doesn't affect the rest of the world in maintaining their forests. Some places far drier are still able to control their forests. Or maybe they just don't have as many people running around starting fires.

California will probably keep running themselves into the ground.

Lets see how that #5 ranking holds as companies and the rich move out. High GDP is also largely due to the fact that nobody would move to California, for a professional job, with the accompanying high taxes if the job didn't also pay more. Higher taxes, higher cost of living, couldn't be sustained without higher pay. But many are finding out how that multi-million dollar house in San Francisco, or LA, is just a few hundred thousand in much of the rest of the country.

And I love how productive those employees are when some are on social media talking about how they get their coffees, check their social media, and usually do about 5 hours of work for their $250k a year. No wonder companies want to keep an eye on them at work and don't like work from home.

And don't put "Proud Capitalist" on a bumper sticker in California. Your car will probably get keyed.

Be better, blue states. Be better.

Following this thread with the back and forth between a CPA and an attorney has been interesting.

The management LLC may provide the entity for employment. Income to the owner, as well as to a spouse, children, or others employed in the business. It would enable financial benefits that are more difficult as a self-employed person, such as insurance, and tax deferred plans.

If you have other businesses, such as a storage facility, or a retail store, would it make sense to have a separate employment LLC that acts as a temp agency for the other businesses? That way you could separate the expense if an employee works for multiple businesses, while retaining the benefits of a single company. Such as payroll services.

Granted that this would be more complex than needed for simple property management, but wondering if the benefits outweigh the complexity.

Very handy to the door to the outside, and plenty of room. I agree with keep it, but update the floor and anything else outdated, to increase the appeal. Remember who you are trying to attract.

Stay away from providing any alcohol. You could advertise it for birthday parties, for an increased cleaning fee, etc.Expect to be cleaning up, since there is a cleaning fee.

And yes, I grew up in Wisconsin.

If all you want is a place to store info for quick reference, then a spreadsheet might be all you need. But if you want reports, saving transaction info, output for your accountant, or help managing properties, then an online service might be more helpful. And a spreadsheet might still be handy for some info.

There have been several suggestions for management tools. Best to compare prices, along with what services they offer. It isn't worth it, unless it does what you need. And while they offer the basic tools, there may be some nice features that make that choice a bigger winner for you. The time you spend looking may be nothing compared to the time and money saved later.

Your need to rent or sell in a month sounds like you don't have cash reserves to handle any problems that come up. That is a difficult situation for any landlord. This might not be the right time for you to own income property, although there are always resources available. A few books on the various topics of real estate might make you more comfortable. Learning the tax benefits and planning for expenses might give you a better idea of what is required.

While divorce may make renters available at this time, summer is the best time for families to relocate. Especially if they are located out of the school district, and want to move to a better school district. Moving kids to a new school during the school year is usually avoided, unless there are other reasons that force the move, like moving for a new job.

Real estate is a challenge and a learning experience. If you can stick with it and learn, you will be rewarded. But if it is too frustrating for you, then maybe passive investing would be better for you.

Good Luck. Hope it works out for you.

California mandated that the electric companies move to solar and wind, leaving little money for maintenance, then blame the companies when their poorly maintained power lines spark fires. As if power companies need incentive to avoid maintenance before infrastructure fails.

And California has continued reducing forestry maintenance until they have now completely defunded it. The forestry service said that they weren't able to do 10% of the maintenance needed, like clearing out dead undergrowth, making fire breaks, or controlled burns. And  since they are anti-logging, there are no areas being cleared and replanted, or paths created to remote areas, making firefighting even more difficult.

Strange, since cutting down trees for use in products is a great way to capture carbon and make areas available for new growth to capture more carbon. And why do they wait to call in the aircraft that can dump liquids on a fire, until they are out of control? Are they trying to maximize the damage fires cause, so they can blame "Climate Change" for the decisions they make?

Insurance companies are raising prices due to the increases in disasters, then leaving when California and others try to limit their increases. They claim the insurance companies are greedy, but if they don't cover their losses, they will go out of business.

Politics shouldn't invade every aspect of our lives, and it is sad that we need to spend so much time talking about it, but unless we push back, it will continue.

I wonder if California would remain blue, if voter ID was mandated.

Good luck in California, when they finally pass laws that all but prohibit evictions, labeled as renter's rights.

Reading this thread has definitely shown me the diversity of opinions on BP.
Where to begin...

1) This thread is not political because someone wanted to push an agenda. It contains politics because politicians believe there is no part of your life that they can't regulate. I wish someone would point out somewhere in my life that there don't exist some laws or regulations that affect it. It is said that every single person violates several laws and regulations every single day.

2) Anyone, and I repeat ANYONE, that believes tax cuts cost the government HAS BEEN LIED TO. Every single time, revenue to the government has increased. The reason debt goes up is because every single politician knows this and spends more money. Increased taxes oppresses an economy and causes people to look for ways to avoid the tax. It doesn't matter, rich or poor, people who have more money spend it. Poor people spend it on things they couldn't afford before, rich invest it to make more money. Because they are spending their own money, they are more careful to get value for their money. Unlike the government that thinks they can just tax or print more money.

3) Inflation is a hidden tax on the poor. Our politicians understand that inflation means debt can be paid with cheaper dollars. This also benefits any investor, as their investment gains in price. People who save money lose value during inflation.

4) The economy is not doing great. The numbers they quote to "prove" that are highly manipulated. Most contain a "fudge factor", where they say "We believe this represents this segment of the formula, and are often inflated in favor of the current administration, and later adjusted down. During the Obama administration, 200-300 thousand jobs represented just replacing the retirees and new people entering the job market. It didn't indicate ANY increase in the percent of people working or unemployed. Most of the new jobs have either been government jobs, meaning that more tax money will be used to pay for them, or part-time jobs, which are often people who lost full-time jobs and must work several part-time jobs for less income than they had before, and often no health care benefits. The labor participation rate is a better indicator, but still highly manipulated. The trillions in excess spending is being used to prop up the economy. They use the GDP to say the economy is strong, but inflation, and all the spending they do is inflating the GDP numbers, but they don't even get a dollar in growth for every dollar they spend. It is more like 60 cents of every dollar. And they you get the benefit of paying interest on top of all the debt they are creating.

5) Raising the minimum wage is inflationary and results in job loss. Companies look to reduce the number of employees and automate any tasks they can. They will also hire more experienced people and expect more from them. And I'm sorry, but people starting their first job, and take off when ever they feel like it, aren't worth a "living wage". Let them live with their parents. If you want to earn more, then please, find a job that can't be done by anybody with no experience. It's funny that people complain about low paying jobs, but nobody wants to be a plumber, electrician, machine shop, welder, or other high paying jobs. It's THEIR choice. They just keep choosing to work for a job that doesn't pay well.

6) Notice in all their comments about capping rents and the evil greed of builders and landlords, they won't consider suspending all the charges they put in place that actually cause housing to be more expensive.

7) Rent caps will be paid for by REI. When you sell the property and can't get what you put into it. Bankruptcies will increase, because expenses will increase more than the cap allows. And property taxes will keep increasing... because they want more money. If they want lower rent prices, why don't they go after New York City properties that block off entire floors of buildings, rather than reduce the rental rates. Many of these buildings are bought by foreigners looking to park their money outside their country. Rental income is just a plus, not the main goal.

8) The rent fixing conspiracy will start with people who use software and services that suggest rental rates based on current rentals in the area. And when they finish with those, anybody that keeps their rental rates current as evidence that you are price fixing. They only care about appearing to do something.

Enough for now. If you object to what I've posted, please provide facts and not just other people's opinions. If you can't be bothered proving it to yourself, nobody else has time to do it for you. I've spent years gathering information, looking at actual sources, and finding out who is factual, and who is just promoting an agenda. As far as I'm concerned, both parties have sold out. Neither is concerned with succeeding, only their own success.

Let's not forget the people who open up the windows at night, because the AC doesn't kick on. And lets in all the humidity that was removed during the day.

I once considered adding a duct and fan to blow air from the basement to the 2nd floor in summer, and from the 2nd floor to the basement in winter. But having window fans blowing out of the 2nd floor, and in on the 1st floor east side kept the house reasonable in Chicago summers. I had the energy plan where ComEd paid me $10/month during the summer to be able to turn off the central air for a couple hours, instead of brown outs. Paid for the few days that I needed the AC. Closing the top floor vents in winter allows heat to rise, so the top floor isn't so hot while the lower floors are cold, or open the top vents in summer to allow the cold air to flow downstairs.

And don't correct them when they use the "real feel", or "feels like" temperatures they have been reporting, just to make people feel as if temperatures are hotter than they have ever been. Just give them the report that says 20-25 degrees is all it can do. lol

Amazing that so few know that the north and south pole were at one time ice-less, and that glaciers created the Grand Canyon... AS THEY MELTED! And that CO2 levels are around 400ppm now, and have been as high as 8000ppm in the past, and around 250ppm, all life on earth ceases. So 400ppm doesn't sound so bad. Maybe they should just start putting out these wild fires, instead of waiting to call in the airplanes after they wait for them to get out of control.

Heat pumps with buried coils would probably handle it better than above ground heat pumps. And what I would consider if I was responsible for utilities, as in STR/MTR properties, along with solar.

You say that you can't afford to pay a lawyer, and losing, pay a judgement.

But if you pay, you are already on their radar. Every time you file for an eviction, will they try this again? Or someone they sell your name to?

And will you now consider this an additional headache, and maybe not be so ready to file for an eviction in the future? How much will this cost you in the future? And yes, bad prospective tenants can also find this out and see you as a mark. There are valid reasons others have said that they would pay more, just to not settle. And I've met too many lawyers that don't fight, but give in. Maybe you just haven't found a lawyer who isn't a wimp. lol

Just trying to show some of the other effects you may not be considering, if you settle. In the end, it is your decision. None of us can choose for you, because we don't have to live with it. Good luck.