All Forum Posts by: Geoffrey M Hersch

Henry, your answer is SPOT ON what I was looking to clarify. Your advice about focusing on an OA and no cash distributions is also perfect as my REI attorney specializes in these shared fractional use agreements and have me the same advice.

Thank you for clarification of the LLC question.

Well...I spend one week a month in the area and brought my boat down there from Dana Point, CA in Oct 2020. I am a passionate marlin angler and love Mexico's people, culture, food, and desert fun. This investment is in a master-planned community with SF homes from $2,500,000 to over $15,000,000+. Condos are all over $1M. It's adjacent to the JW Marriott and Ritz Carlton Reserve and Residences, gold course and ocean views galore. I have been to the area 33 times in 28 months, it never gets old, and I have never felt unsafe. The real estate market, especially for new homes and preconstruction purchases, are still booming with low inventory. 

Regarding the Wyoming LLC rec, I read and was told that even if I file a foreign (Out of state) LLC, I will have to file a CA income tax return for the property. Thus double paying as i'd have to pay the $800 CA FTB annual cost anyways. I can't find a definitive answer on my original question anywhere.

I have a pressing issue that my current CPA can’t seem to answer to my satisfaction.

I am currently in escrow on a vacant lot to build a shared fractional usage and rental home in San Jose del Cabo, BCS, MX.

There will ultimately be 4 partners in the property, possibly from different states. Two of us are from CA and one potential partner resides in Utah. The 4th unknown and TBD (reach out if you might be interested in this amazing opportunity).

I need to open an LLC immediately as the Mexico closing company is wanting that information to put the LLC as the beneficiary of the Mexico Land Trust that will own the property.

I have spent HOURS and DAYS researching the comparisons between CA LLC, NEVADA, OR DELAWARE LLCs (or any other for that matter) and cannot find a definitive answer on this.

Question: Do I open a CA LLC or an LLC in Nevada or even Delaware?? I want to minimize our foreign tax owed if that makes a difference and also reduce our annual LLC maintenance costs from what would be the $800 California Franchise Tax, etc.

Heard that even if I do a Delaware LLC, that I will need to report or file a "foreign" property/informational return or something like that that would require a CA return and thus the $800 FTB cost anyways?? Therefore, I would be double paying bother the foreign LLC costs and the CA Franchise Tax fee annually, plus the costs of the registered agent.

Needless to say I am VERY CONFUSED on how to proceed. I was told that a “good tax attorney and CPA” should have a quick and easy answer but I am not finding that as the case. Ugh!!

I am pressed to have an answer very soon on this. 

Thank you, Geoff 

Hi all.  Wife and I are under contract on our first investment property in Boulder, CO. Yes, it is a tough market to cash flow due to home values but we decided to do it.  1BD 1BA 441 sqft condo VERY close to CU Campus.  Son will occupy home for first few years after closing as we'd rather pay ourselves rent than pay another landlord. 

This will be an owner occupied second home essentially.  We are locked in for 30 yr mortgage at 2.625% and we will put 25% or so down. 

My question is about structure of loan and title.  We do want our son's name on the title for the owner occupied status but aren't sure if there is any reason to put his name on the loan itself.  Also, do we buy title the home in the family trust adding my son or do we title it individually (Myself, wife and son)?

Hope this makes sense. 

Thank you, Geoff 

I'm learning a lot but some of the terms are new to me still Frank.  What does "underwriting the numbers" mean? Also, when I say 8-12% I meant cash on cash not Cap rate.  The cap rates are lower if I am doing this right. 

There are several properties that have been renovated in Columbus in what appears to be a nice rental area close to campus as well. Would you recommend the idea of buying an already renovated (but more expensive) home that qualifies for that OSU Housing Incentive or buying an older home in need of renovation and following the BRRRR philosophy? Either way, according to my calculations, they cash flow between 8-12% that first year with the already renovated properties. @Remington Lyman might know best here!!

@Frank Patalano I have not spoken to any of the realtors yet.  The calculators I am using on Bigger Pockets and other Excel spreadsheets that have been provided to me all show positive net cash flow but the question is, especially for the first investment, how much is too little to make it a "good investment"? Thanks again Frank. I am learning a lot here.  

@Remington Lyman Thanks for that! There are several 100% Renovations near OSU that are gorgeous.  One, particularly, a duplex with 4BD/2BA in each unit would rent for an estimated $4,800/month.  Selling for top dollar I assume at $586k.  It does cash flow but with the high loan amount I'd have, I could probably buy several lower priced properties.  This is when my analysis paralysis starts. 

Looking to get started and overly researching the how to's and different strategies.  We live in Orange County, CA where homes are very expensive.  We are therefore looking to purchase out of state in Ohio, Colorado and may focus on areas near large universities.  We have also looked on Roofstock but either way, we would be purchasing a site unseen property.  Ugh... needless to say, I am paralyzed by fear of overpaying, remote management and of course, losing money.  

We have run numbers on inexpensive SFH properties under $100,000 in Ohio in addition to more expensive fully renovated duplexes for the mid $500,000 and every property we've looked at has positive cash flow BUT NOT MUCH. Is it worth the investment to purchase a property that cash flows $200 per month compared to those that cash flow for $1,000 per month? Depending on the downpayment/investment, the interest earned on the money in the market would be more than the property cash flow. Make sense??

I am also interested in buying my first rental income property and am new to Bigger Pockets.  When looking new the OSU campus, I noticed that they are many renovated properties that are part of the Ohio State University Homeowner Incentive Program.  Do these homes that are part of this program increase the attractiveness of the investment? They seem quite a bit more expensive than the average value in the area probably because of their recent renovations.  This is my first post on the site so should I throw out an address here so someone can evaluate the income potential for me? Thanks to all.