All Forum Posts by: Geoffrey S.

quick books online isn’t worth the subscription fee. 

Buy it outright. The online version becomes more expensive within a year 

 With only seven doors so far, and all my stuff more or less input after two days, I think I will stick with QuickBooks for now, as I got the desktop version and won’t have to pay anymore. Thank you for the offer, though.

yeah, i have been spending time on YouTube doing that.  It’s just  that I have no accounting experience and I created my own spreadsheets when I started this (I created and know my own system, not this one). It’s taken a day so far of starts and stops to input last year’s numbers and I thought it would take less time. 

Purchased quick books. Experiencing the learning curve as we speak 🤮

I've got 7 doors that I self-manage and i'm set to add some more in the coming year.  I've been bookkeeping with a google drive spreadsheet.  A new tax year is upon me and I'm thinking of buying quickbooks, as it would help me file my taxes and would look better to a lender than the expense sheet of my own creation.

Thoughts?  Are there other software products out there?  I like quickbooks because it doesn't require you to pay a monthly subscription and it's got a good reputation.  

did you set this up yourself, or did you use a lawyer?

your income flows through the LLC and is the same as the personal rate?

Agree that financial downturn is likely imminent.  Wife and I reason that we should be using funds to pay down houses now, but when the fall comes, we should switch and start buying shares of an index.

We don't see much value in the current market.

I purchased all of my properties on 30 year fixed mortgages (no pre-pay penalty).  I've read in many places in the BP forums and elsewhere that I should now aggressively attack the debt I carry with prepayments (debt snowball is commonly recommended).

The idea of owning my properties free and clear appeals to me (I don't like making mortgage payments, especially the interest portion thereof).  However, when I run the numbers, it works out to a mediocre return on my investment.  

I carry an average $55K balance on my places and pay an average $320 in p+i each month.  

Paying $55K to save $320 a month makes ~ 7%. ($320 per month x 12 months) = $3840 savings per year / $55,000 investment = .0698.  Besides, I'll lose the tax write-off of mortgage interest.

I can beat that over time in the stock market.  Wouldn't it make more sense to take all money I can from rental income and just put it in the S&P500, or reinvest elsewhere leveraged?  I keep a cash cushion that (I think) is adequate for emergencies.  The voice in my head tells me "when you disagree with the majority of people, you're usually missing something"...

Thanks for the replies!

To answer some questions that came up: I own 6 properties (7 doors).  I've owned one for two years, then purchased the other 5 last year, so the 25-35K/year figure is still very speculative.  I currently have them owned in my name and have umbrella liability insurance in addition to my HOI.  I was going to quick claim the deeds of the houses to LLCs for additional liability purposes, and I was investigating options of how to structure the ownership and the income flow primarily for the purpose of lowering my tax burden.  I figured I'd change ownership and income tax strategies in one shot for simplicity's sake and to save on lawyering expenses.  

I didn't speak directly with any attorney--I'm still gathering information from as many sources as possible to educate myself before I speak to any professionals and make a final decision. I was just present in the room when my Friend discussed my situation on speakerphone with the person at the office who does intake of new clients.  The price she quoted then went as high as 14K, depending on what 'package' I purchased.  My friend said that the law firm's services for him (labeled as a 'gold' or 'platinum' package, or something) were 

1) establish separate LLCs for each property, all based in the home state of the properties.

2) provide forwarding services for him (someone from their firm gets mail at the LLCs' listed address in that state and sends it on to him) 

3) establish a c-corp for the income to flow through in Nevada, where he avoids state income tax.

Friend has part-time employment but also lives off the rental income.  He claims only to pay the C-corp's tax rate on that money (15% on all rental profits below 50K).  He was advised by the firm that he'd want to change the income structure if/when he wanted to qualify for a loan, so as to boost his AGI on his 1040.  

I dunno, I'm attracted to the prospect of halving my tax liability, but it doesn't sound exactly legal, given what I've read about income from a C-corp.  From what I've read, c-corp profits are only taxed at 15-21% if the money stays in the corporation, but maybe if you're on the board of the C-corp, using the funds for x,y, and z falls under the category of keeping the funds within the corporation?  

Regarding my CPA, I have one, but am not entirely satisfied with her.  Contact information of a good, but not terribly expensive, CPA would be appreciated.  

I received a tip from a friend that taking my properties and incorporating them into a c corporation is the best tax structure for me.  I've got a full time job and, for now, the rentals are supplemental income/retirement fund--netting 25-35K/year before taxes.  Obviously, I'd like to increase that, but that's where I'm at until I feel comfortable venturing out into something else.

I've researched a bit and heard repeatedly that incorporation of my holdings is not something that I should attempt to do on my own--I will need a lawyer.  Friend's lawyer charged him 7K, but quoted me 14K (friend is an expert haggler).  Anyone else done this?  Tips?  S corp is better?  Sole proprietorship is better?  If I'm making this little money, it'll take years to pay off.  Should I bother?  

Should I bother to try to incorporate in one of the tax haven states (Nevada, Delaware, Wyoming, etc.), or just play it straight and pay up and incorporate in business-not-so-friendly California, where I live?  Any advice is appreciated...