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All Forum Posts by: Drew Holland

Drew Holland has started 0 posts and replied 42 times.

Post: Accounting Business for Real Estate Investors

Drew HollandPosted
  • Orange County, CA
  • Posts 42
  • Votes 22

@Elena Casey Our outsourced accounting company for real estate investors preform many of the above mentioned services. We're always looking for professionals to join us.  Please PM me for me information.  

Post: Taxes for flipping schedule C vs investment

Drew HollandPosted
  • Orange County, CA
  • Posts 42
  • Votes 22

@Patricia Vildozo It's a combination of the comments on here.  The taxing authorities look at intent along with consistency.  You can say your intent was an investment and put on your Schedule D however if you're doing a few fix and flips a year then your intention will be irrelevant and taxing authorities will look at the consistency of the type of work you're doing and classify it has ordinary income for your Schedule C.  If you're planning on doing this type of work in the future then classify it as ordinary income to stay consistent, if it was one for that year then look at doing an Schedule D.  Not sure of the property value yet the tax savings might not make it worth it (i.e. accounting and tax costs = 2K; amended tax savings is 1.5K).  These high accounting costs sound like a real possibility with your incompetent accountant.  Shoot me a PM if you want to connect and discuss further.   

Some other notes; you have single member LLC so your name vs LLC name won't matter for tax purposes (I think this was mentioned). If you lost money then you'll have a loss carryover which may not be good now yet could help you in the future, typically your net operating loss (NOL) will offer more tax advantages than a capital loss (on your schedule D). Finally you may want to erase this post if you're planning on using Schedule D...

Post: New Wholesaler starting/creating a business

Drew HollandPosted
  • Orange County, CA
  • Posts 42
  • Votes 22

@Lacey Haessler Don't work on things you already know you don't want to do if you can afford to outsource it. Some great advice on here and I'm a fan of leveraging teams and technology. Also taught to lead by example so you must be able to preform what you're delegating (even if you don't like to do it yourself). PM if you'd like a few different VA options (I've interviewed several); some do charge for process building and onboarding, some don't; 4k is bonkers!

Post: Where will people move - Exodus from Cali and NY

Drew HollandPosted
  • Orange County, CA
  • Posts 42
  • Votes 22
Originally posted by @Account Closed:
Originally posted by @Phil Wells:

@Jeff Lundeen it’s not necessarily out of state where people are moving to. Here in Washington I’m seeing a lot of people leave the Seattle area and head for the slightly more conservative East side like Spokane.

Having said that we have no state income tax so that makes WA a slightly unique situation.

This is my thought re: CA, too.  If people here can work from anywhere, they'll probably just move somewhere cheaper in CA.  What people aren't taking into consideration in this discussion, as far as why someone would or maybe should stay in CA, is Prop 13 - our law that says our properties can't be reassessed as long as we own it - and - we can pass that benefit on to our heirs.  The taxes can only go up - by law - a max of roughly 1.5%/year.  That's huge for homeowners or buy and hold investors.

I've lived in WA and TN, and there's a lot to like about both, except the weather.  It's hard to move from the west coast to the south, culturally.  Our joke about WA when I lived in the mountains a couple hours from Portland, OR, was that we had 9 months of winter and 3 months of bad sledding.

And by the way, a large portion of CA is red, as far as how the counties vote, or it's pretty evenly split red and blue.  It's just in the major metropolitan areas, which are a tiny part of the entire state, that vote blue.  So, you can simply move to another county and hang out with cowboys and hunt.  Like Idaho with CA weather :-)  

As to taxes - any place with decent amenities pays for them with taxes.  So, if it isn't sales taxes, or income taxes, it will be property taxes.  The taxes are there, though. 

EDIT: I found this map that shows how different counties vote by party affiliation in CA: https://s.hdnux.com/photos/01/05/55/34/18274072/7/640x0.jpg

People forget how big this state is and that we still have real cowboys and cowgirls.

Do you think they will repeal Prop-13 to cover extreme budget shortfalls?  I've heard that idea tossed around.  Especially if tech co.s start leaving the state then CA tax revenue will continue to drop and they'll at additional revenue sources.   

Post: Can I live in a house owned by my LLC?

Drew HollandPosted
  • Orange County, CA
  • Posts 42
  • Votes 22

@Simon Obas From my understanding and experience you can yet need to pay rent to the LLC; that's how I've seen it before. as @David M. said, you'll incur additional costs to move money from one pocket to another, yet I understand the benefit to doing this if you're going to do it properly and completely.  To clarify, if you're going to have an LLC, it should be created for the property itself (and only that property/asset) and then put it in a land trust as well.  Make sure banking and books are separate and clean.  Otherwise you're using the LLC incorrectly, IMHO.  

Post: Wholesale Real Estate

Drew HollandPosted
  • Orange County, CA
  • Posts 42
  • Votes 22

@Andrew Moran I'm also in Southern CA and agree completely with @Cornelius Charles regarding the seller's market and delta between good deals and what home owners out here want (and are sure they can get, in most cases).  What I do is make tons of offers and kind of piss people off, from there you'll start to feel out motivation/pricing and eventually some will start to pop.  Meanwhile also look at some other virtual markets you may have some familiarity with.  Even without marketing spend you'll be amazed how much easier it is to find deals in those markets compared to CA.  I'm very far from an expert investor and this is simply what has worked for me so please take with a grain of salt.  

On a side note, we may start to see things shift in certain CA markets as folks no longer have to pay a premium to work in cities like San Fransisco, LA and SD.  Will be very interesting over the 2 years.   

Post: We will fund 100% of your next wholesale deal

Drew HollandPosted
  • Orange County, CA
  • Posts 42
  • Votes 22

@Anthony Dadlani  This sounds like transactional funding with a 45/55 profit split.  So we put properties under contract or purchase, then do disposition as normal (perhaps some clean up) and give you over half the profit the assignment fee (gross profit)?  Why would anyone do this?  There are lenders that will provide capital with many of the same benefits (private money included) at a reasonable interest rate.  

Example:  

Purchase Price: 790K (including 20K wholesale/assignment fee)

ARV: 920K

If I wholesale to investor I pay you 11K (20K assignment fee * 55%) and keep 9K.  If I do cleanup for 50K (out of my pocket) then whole tail for 920K, I pay you 55K (100K profit * 55%) and keep 45K.  Am I understanding this correctly?  If so, still not seeing the value and perhaps misunderstanding.  

@Jesse Littrell Flood rehabs costs in Houston for 3x2 ranch are approximately $120-$150K from what I've seen.  @Andrew Taylor is absolutely correct and rehabbed flooded homes are selling for more than their non-flooded counterparts.   

@Bridget Dunlay It depends on the asset class, type and market.  Green Street Advisors released a report a few days ago (May 6, 2020) that analyzes the state of commercial markets.  Industrial and few other commercial assets are performing well; others not so much.  Very insightful, with data through April 2020 and I've attached a link to the report below.

https://s3-us-west-2.amazonaws.com/gstqa-us-west/uploads/2020/05/05160502/GSACPPI20200506.pdf 

Post: Real Estate Investment Group

Drew HollandPosted
  • Orange County, CA
  • Posts 42
  • Votes 22

@Stephen Holmes I've overseen and controlled private REI portfolios ($800MM+) and currently have a few RE focused companies of my own. I'm in; please send DM or post info here.