All Forum Posts by: Fred Cannon

To add to my reply. For the life of me I can't figure out the advantage or disadvantage of an LLC if you don't have any employees. There are pros and cons but it seems very complicated and not needed for the most part. I really don't want to have a hundred rentals and a hundred LLC's and then three holding companies. I thought REI was anoint passive income and sitting on the beach drinking margaritas and Coronas for crying out loud.

@Cody Malave. I have asked 3 CPA,s and 2 lawyers about setting up an LLC and have gotten the same answer. It doesn't give your personal assets complete protection and it doesn't give any more tax write off than you currently get. The advice is insurance coverage and meticulous record keeping from all 5 interviews. I keep separate ledgers for each rental, have one checking account and one savings account that I use for deposits. I have other income so I have a personal checking and savings as well. Set up a simple xcel sheet for each property with columns for different types of entries. I.e. rent, maintenance, replace (cap x ) taxes, insurance. Lawn care Etc. keep a log for travel expenses (over a year this can be a nice deduction at .55 a mile so don't miss out) My CPA loves my spreadsheets because everything is defined and all the totals are there for her. It's a simple system that catches everything. I pay taxes quarterly based on previous years totals. Settle up with the IRS in April and start again. I know some people have LLC's for each property and then a holding company for all their LLC's. I have six properties so not that big time and don't want all the extra record keeping and expenses. We are just mom and pop investors looking for retirement income and we feel good about providing nice housing for people who need it.

Yes in St Augustine property values are high but my niche is 1 bedroom condos. If you can find a good HOA with low fees then you can get 8-10 percent return plus mortgage pay down plus appreciation. ( and not worry about evicting Mom's with little kids ) SFH and MFH are priced to high for the rents you can get unless you want class C- D neighborhood. I am a finicky landlord when it comes to ownership and stay away from those. However I am always looking. Merry Christmas to you and your family.

@Josh Twaddle I would do want makes your life better. Outdoor entertaining is great. A pool will become a money pit especially if you turn this into a rental. ( speaking from experience ). Upgrading the landscape is always a good bang for the buck especially if you do it yourself. Maybe a security system. Crown molding if you don’t have it adds value.

In most cases I would agree to go with the eviction but in this case with a tenant that has a good past record and is willing to and wants to work out a deal I would be willing to take a chance.  In three months when the lease is Up and things haven’t change then don’t renew.  At least give them a 30 day notice so they can find a place to live and you can advertise for a tenant and in the mean time you still have their deposit.  Most people are hard working and honest, if you think this is true about your tenants and they haven’t lied to you about their situation let them stay and pay reduced rent for a couple of months. If it works out then increase their rent to cover the lost income on the new lease. If it doesn’t work out keep their deposit and give them a 30 day notice before the end of their lease. 

@Jane S. I think I would take the 1100 for 3 months if your rental sets empty for a month and during that month you hire someone to redo the bath you are out more that the lost rent. If he is a tile setter then the remodel should be fairly easy for him. I think I would have a plumber do the piping and valves though. I am a pretty handy guy but when it comes to plumbing and electrical work I always go with a pro. Hopefully in three months he will be able to return to work The body and modern medicine are truly miracle workers. I had full knee replacement for both knees this year and was back to work in 12 weeks

If he is a good tenant then I would give him the break the worst you can do is break even if they can pay the 1100

@Vadim Sedletsky. I am asking myself why should I have an LLC. My CPA and my lawyer tell me there is not much advantage or protection unless you are employing several people. If it's just you and wife then all the benefits you get with an LLC you can get without an LLC with proper record keeping. If you have proper insurance to cover you then why go thru the hassles of having to manage your properties and then having an additional burden for making sure your LLC is functioning legally. I see some people have several LLC's so they must have a better understanding than I do. I will keep following this thread, might learn something. That's for asking this question.

@Maxine Kunimura you have two issues. Your lenders should not be requesting you to falsify a document. You do not qualify for the loan due to DTI. Daycare is so expensive, maybe as much as your mortgage will be so it is a legitimate concern for the lender. Don't think he should be going this route but I'm sure he is trying to get you qualified. Giving him appreciation for that, you could write a letter stating that Daycare cost is temporary and will end soon, without being specific. Good luck hope it works out.

@Pedro Jean she must qualify for other government assistance as well 4 kids is a lot of upkeep. You are a good person if you are willing to take this risk. If she doesn’t pay could you evict 4 kids Tough call. Good luck

was a banker trying to get people to invest in CD’s and annuity products.