All Forum Posts by: Account Closed

10 cap NNN???? sounds unlikely

Sarah,

You need to find a portfolio lender that will close in the name of an LLC and purchase in the LLC. Portfolio lenders will have more of an ability to work with you because they do not sell their loans to fannie and freddie. You still need to show a good credit score and income, but provided you are putting enough down and the debt service coverage ratio on the property is in line, you may have a chance. Would be happy to discuss further with you.

Ezra - passive activity losses are carried forward when not used, so you can use them to offset passive income in future years.  If they are unused upon sale  of the property then they can be used to offset the gain or tax on depreciation recapture upon sale.  Hope that this is helpful.  

I am a CPA and Realtor currently based in Orlando. I would caution using this % as your sole indicator. Maintenance, appreciation rates, taxes and HOAs are all going to have an effect on your ROI. I think the rental market is interesting, but I'd focus on areas which are seeing appreciation and have a lot of upside even if the yield were not as good.

There are no tax advantages to incorporating in one state over another.  This is more of a question for an attorney.  There are nuances and advantages to incorporating in one state over another, but many times it simply makes sense to incorporate in state you will operate in.

I have 13 properties and each has it's own Quickbooks file and bank account.  The setup works well for me and I'm very happy with it.  It's not for everyone though.

Yoann,

If you form the LLC in NV or DE and the LLC plans to operate in NY it must still register in NY as a foreign LLC. In this case you are going to have to comply with both state laws if they require annual reports or filings etc.

I have one LLC per property and I don't find it to be a nightmare (although I am a CPA). Each LLC has its own bank account and I find that compartmentalizing each property keeps me organized and allows me to analyze the performance of each investment in more detail.

I am still not clear as to why you would want a third LLC to manage the other two though. I don't see any real purpose for this entity.

Why?

Since you're paying cash I will assume you don't plan to issue a 1099 to these laborers.  But if you deduct a large amount for contract labor on your tax return and haven't filed any 1099's then the IRS could start asking questions...........