All Forum Posts by: Dominic R.

Thanks Natalie. Looks like I have to straighten this out. When the LLC was formed the IRS help line told me I could file it with my 1040. That's what I get for trusting the IRS.

My wife and I have held a property in an LLC for many years. I do my taxes online and include the LLC with our personal taxes (married filing jointly) since we are the only managing members. In 2018 we purchased 2 more properties into the existing LLC. We purchased them as cash and transferred the money into the LLC from our personal account to pay for the properties and legal expenses. My question is how do I handle the money. Is it reported as income for the LLC ?

my lawyer informed me that title insurance didn’t care.  Never passed it on to the seller and he offered to pull permits and upgrade the second floor to code if we split the cost at closing.  So he is upgrading the electric adding larger windows and removing the illegal kitchen.  He is using a contractor that we know so it looks like we’ll be getting the house in a couple of weeks.

https://www.biggerpockets.com/users/Wheati

Check your local laws.  In many states military are exempt from notice requirements.

A little background on our situation. We found a nice 2,400 sf. 3 bedroom and 2.5 bath Cape in a B+ neighborhood in a A+ town. The house was in great shape and the price was reasonable. One problem was that the second floor had been turned into a really nice but illegal in-law apartment. Our plans were to buy the house, remove the upstairs kitchen and convert the second floor into 3 bedrooms and rent it out as a 5 Bed 2.5 bath SFH. About 10K to do the work. Our PM looked at it and said we would be able to easily get 2.5K to 3K in rent due to the area. We put in an offer and eventually came to sign a contract for a cash purchase. We scheduled an inspection and found some code violations with the electric panel in the apt. We then went to the townhall and pulled the assessment and found that they had discovered the apt. in 2005 and added it to the records. We then went to pull the building records and then found out the building department didn't even know there was a finished second floor. The building official said it was no big deal and he would work with us after we bought the house. Now since the assessor and the building department records don't agree our PMs lawyer says it would be impossible to get title insurance. So we informed the seller that we need a extension so they can clean this up before we or anyone can purchase it. Their agent agrees and we are waiting the sellers reply.

So here is the question.  My wife believes that they need to pull the permits and bring the second floor to code and sell us the house since it is under contract.  My belief is that the contract is now void and they can pull the permits to convert the apt to bed rooms, fix the electric and put the house back up for sale at a much higher price.  I personally hope my wife is right since I really want this house at this price.  So where do we stand.

@Diane G.  Why blame the PM?  Mine does background checks, credit checks, sex offender registry checks as well as past landlord statements and employment verification.  I hardly believe this type of individual has never left a trail.

@Francois Frigon  I meant to say I bill the late fees direct.  I just send them a letter with a copy of the envelope showing it was mailed too late to be received on time with a statement that per the terms of the lease you owe the late fee and to include it with your next rent check as a seperate check.  I usually wave the first late payment but I call them and explain that it is a one time thing.  

My best advice is to search your state's website for your responsibilities. Most states have some sort of guideline for landlords.

1. Either will work.  Never thought of a P.O. box but it is a good idea since I have tenants surprise me at my house to drop off a check with no notice.

2. In CT we must provide the tenant a Security Accounting Statement with in 30 days with the whole or partial deposit including interest.  Explaining any charges. If not they can sue for double the deposit.

3. The utilities will control how you handle it. Here they just transfer them to my LLC with a phone call. If the tenant moves and a new one moves in within a billing cycle they transfer directly. We just make sure the tenant leaving is current before returning the deposit.

4. You are the Managing Members of the LLC. I do introduce myself as the landlord but I use the title on all correspondence to make sure that I treated as a business corporation.

5. If they don't qualify they don't qualify.  You don't have to rent out to just anyone.  We do credit and background checks on everyone.

6. we charge a late fee if paying past the 10th of the month.  We bill them direct as a incentive to pay on time.  If you have to after the fees that is one of the things to include in the Security accounting Statement.

Most important is to make sure you are compliant to your states regulations.  I have made many mistakes out of ignorance luckily none have come back to bite me.

Best of luck

You should contact Fran Demaio at CT Realty Partners/Vacancy Busters in New Haven.  She is my property manager and is presently closing a deal for some duplexes for me.  Her main business is working with investors.  She is independent allowing her to be flexible since she does not have to answer to a major real estate corporation.  Without her I would have been lost starting out.