All Forum Posts by: George Xu

We use Apartments.com (and former Cozy before it got acquired). It’s a completely free service that allows you to setup your tenants and collect rent automatically. We self manage and have a dozen or so tenants so having a dashboard to view who owes what is a huge time saver. It also makes the tenant experience more professional vs using Venmo or Zelle. 

We started off with condos but now do almost exclusively multi families. I do think condos are a great place to start because there’s less to manage and worry about. However the downside is that you don’t have full control over what happens with your property. In our market, the returns on multi family were also much greater. You have a lot more flexibility to do what you want to maximize rent and reduce cost. 

Thanks to a lot of great information here, my wife and I have grown our RE portfolio to a point where it probably doesn’t make sense for me to be using TurboTax anymore. We both have high paying W2 jobs and our tax liability is substantial (~$200K). While I enjoy accounting and learning about tax law, I’m realizing that it’s not the best use of my time and I’m likely not taking advantage of the strategies that exist to reduce our tax burden. 

I have spoken to some notable local accounting firms including ones that my wife’s business use and they all seem too conservative. Their goal seem to be to avoid audits. My goal is to lower our tax liability to the fullest extent of the law. I have successfully defended against an IRS audit so my risk tolerance is high on this front. 

Going forward, our plans are to continue to acquire rental properties. We have never sold anything and don’t intend to. My wife will continue her job (she’s a physician) and I will likely transition to managing our RE portfolio full time (I do all the property management today already). In “retirement”, I will likely do some consulting gigs and participate in ventures that I’m passionate about. One day, I would also like to justify the cost of airplane ownership :) 

Any leads or recommendations would be greatly appreciated! We are in VA and the properties are in CT.

Thank you!

Thank you for your quick responses and clarifications!

If qualified to take the 20% QBI deduction, do we have to take it? One of my properties has a net loss for the year and opting for QBI deduction actually increases my tax bill. For my other properties with positive net incomes, QBI is beneficial. 

Thanks!

Thank you guys ... this place is definitely a treasure trove of information. 

My wife and I are fortunate to have steady, high-income producing jobs. Our rental real estate portfolio is also starting to produce a decent income. Our properties are currently held in pass-through LLCs which are not tax advantageous for us given our higher tax bracket. I'm thinking we should change ownership of the LLCs to a corporation, which will get taxed at a flat 21%. We don't plan on taking distributions and will re-invest the money earned in additional properties. 

Is forming an S-Corp to hold the LLCs the best approach given our situation? What are the alternative options? The things we care about in priority order are 1) Asset protection 2) Tax savings 3) Ease of maintaining.

Thank you!

Hello BiggerPockets!

We are a husband and wife team with investment properties in CT. We started investing in rental properties in 2016 and have a portfolio of condo units, single family, and multi-family houses. We've completed one re-hab and are currently working on another one. We both work full time in non-real estate professions (tech executive & physician) and are currently self-managing our properties. Our near-term plan (in the next 6 months) is to formalize our real estate business and set up the right entities for asset protection and tax purposes. Our long-term plans are to continue to build wealth through real estate investment through scaling our investments in rentals and looking into other real estate opportunities (e.g., commercial properties, development). 

We would love to connect with other real estate investors and professionals, especially CPAs, lawyers, and others to help round out our team. I'm especially dreading what our tax liability will be this year.