All Forum Posts by: Grace R.

My husband and I have an LLC (incorporated in NV but we live in CA) in which we have 50/50 ownership. We currently 3 properties: a CA rental property in his name, an IL property in my name, and our primary residence in both our names. We plan on continuing to purchase properties in our individual names until we max out our available slots. And we were going to transfer the rental properties into the LLC, starting with my husband's CA rental property.

However, our lawyer is saying that in order to avoid reassessment (and likely a higher tax bill), we'd have to claim the Proportional Interest Transfer Exclusion but this won't work in its current state because my husband currently owns 100% of the CA Property and only 50% of our LLC.

I'm thinking we may have to open up a second LLC in which I have 100% control and change ownership on the one that's already open to 100% control in his name? And that means $1600 to the FTB every year :( Any advice on what to do would be greatly appreciated!! TIA and happy holidays!

Sounds great, count me in!

Hi BP'ers, I'm hoping you can weigh in on my dilemma. I'm pro-buy and hold for cash flow (we currently hold one rental property that's generated monthly cash flow for us) and my husband, while also understanding the value of this approach, wants to move into flips. He also wants to pool together capital with another partner or two to buy what would be all of our first flip house. While I understand the benefits of partnering to bring together working capital faster, I have concerns/questions about: 1) how to choose and evaluate a partner (the potential partners are new to flipping too. I know what my husband and I bring to the table, but I'm less certain of what they can bring, besides capital - and I'm skeptical that capital alone is enough). 2) how to structure the partnership deal. I've read a bit on here about joint venture docs but any additional light/experience that can be shed on this would be greatly appreciated. Thanks!

Hi everyone, hoping you can offer some thoughts on this deal. My husband and I are in escrow on a new primary residence that cuts both our commutes in half, is in a more established community, etc. Because the house needs some updating, we are getting it for less than what comps are in the area.

What worried us initially is the 20-year Solar City lease, with 2.9% annual payment increase escalatory, tied to the property. But after some back and forth we were able to get the seller to agree to pay off the entire amount due on the solar lease ($19k). 

[Side note: I would have loved to have the seller buy the system outright, but in the contract, the system needs to have been on the roof for 5 years before the buyout is even allowed. And the system has only been on the roof for 3 years].

So now we'll be able to use the solar for free for 20 years (yay!). But of course the next logical question is what happens after the 20 years is up? Solar City offers two options: 1) Buy the system outright at the end of the contract or 2) Sign a 5-year extension on the lease (ha, yeah right!).

My thoughts are that we wait until year 20 and then buy the system outright. Solar City says they send a 3rd-party appraiser to determine the buyout price. After 20 years, the panels/inverter will be about 5-years from the end of warranty and should be appraised for far less than in year 5 (when a buyout is first allowed).

The one concern I have is that maybe the buyout price in year 20 might still be high (5-10k?). I figure that when push comes to shove, we'll have to buy the panels out no matter what, in order to remove the "fixture filing" Solar City puts on title.

What do you think of this deal? TIA!

Thanks for the input @Larry Turowski! We do have at least 20% down saved, so we should be able to move forward with either option. You've given my husband and me good points to consider...

Hi everyone,

First time poster here... :) My husband and I are moving forward with real estate investing and would like some advice from tax and legal standpoints. We are trying to decide between:

1. purchasing a new home with a trust and renting out our first home, which was purchased in our names. Then doing a cash-out refi on our first home in Oct 2015 (when we told by our bank we can get out of the PMI) and buying a du/tri/fourplex with an LLC. And after the cash-out refi, putting our first home into the LLC.

2. purchasing a du/tri/fourplex with an LLC and remaining in our first home until Oct 2015 and then doing a cash-out refi to buy our new primary residence. Then renting out both the duplex and our first home after putting our first home into the LLC.

We're ultimately concerned with protecting our assets in a worst case scenario-type situation. We are already planning on getting an umbrella policy but would also like to take advantage of the protections afforded by an LLC (which undeniably aren't too strong in the great state of CA). Which is why we're also thinking about incorporating in Nevada and and doing business in CA.

Any advice and feedback on what we should do - or what we should also take into account - would be greatly appreciated!

Thank you!

Grace