All Forum Posts by: Gregory Wilson

Turns out Cleveland is even better than Cincinnati the way they do it by separating classes of tax on residence, employment and business (rental). Just get the form. You'll see.

You pay City tax where the income is earned in Ohio. If the employment is in Columbus and the rental property in Cleveland, the income is apportioned. Get a copy of the Columbus tax form and look at the apportionment schedule on about page 3.

Hey Dillon! Congrats on your first child. Enjoy it while she is young. You did not pick the best time to start down the flipping road because interest rates have risen, demand has gone down and yet sellers are still hoping for an inflated value.

My first flip was a two family where I lived in one unit and renovated they other, then reversed the residence and renovated the other unit. It would be pretty hard to renovate a SF while living in it with a baby. But, in this climate the risk is great and the reward small for a straight up flip due to carry cost and transaction costs.

Be careful. A loss will be very discouraging.

Quote from @Sharad Bagri:

We are a few friends looking to invest in multifamily apartments (<4 units) in Ohio. We haven't done real estate deals together earlier. We need guidance on how to structure our partnerships. Are there templates that can work as good starting points for us. 

Also, we will be doing standard downpayments and financing. So, should we create LLC and get the loan in the name of LLC or should we take the loan individually.

Should we have umbrella insurance to protect ourselves?

First, accept the premise that partnerships rarely work. There are a lot of studies on this but it is not the immediate response from professionals whose business it is to document all the ifs and and buts of a partnership and to  problem solve for the inevitable problems. I try to discourage anyone who consults me from doing any partnership. The worst are three person partnerships.The most stable are 10 or more. A two person partnership at 50-50% each has been often described as legal malpractice.

Consider having persons assume the roles they will actually perform and document that role:

The guy who finds the deal is the owner. The person who runs the operation (rentals repairs, bill paying) is a manager. The person who puts in the money or whose guarantee gets the loan is the money lender.

All of those roles can be established by contract with appropriate compensation. And, if there is a sale they can share in the equity. There isn't any role in multi-family rentals below a couple hundred doors that requires two persons in charge.

But when the starting stalls gate opens and the horses come out, there is only one jockey on the horse.

Quote from @Brad Smith:

@Allen Duan - For corporations, who do you typically reach out to? The HR head? Or is there a separate relocation/leasing departments in these companies? 

Also, can you suggest a few relocation companies that you might know of? Thanks in advance.

I don't do MTR. My units are occupied by P&G, Children's Hospital, UC, and Kroger employees. They are all LTR. However, i get many calls seeking MTR from relocation specialists and have never gotten calls from any of those companies.

Quote from @David Borreson:

You should contact my friend William Littlejohn with CSR Collective (csrcollective.com). He said he'd love to talk through the details of your project. 

 
I like Littlejohn. I used him when he was with SSRG in 2017.

The Cincinnati Metro area has 71 zipcodes. I have been told that it takes two years on the waiting list to get a Section 8 voucher. The real estate tax rate within Hamilton County is often seen as prohibitive. A 700,000 FMV and Assessed Value property(most recent sale price is tax value) is taxed at $20,000/year. If that is a 6 unit building, then you are paying $3,300 per unit per year in real estate tax.

Paul, I'd also like to mention that doing a 1031 for $75k of long term capital gain is pretty iffy. If you are taxed at 15% on LTCG that is all of $10k. A lot of baggage for a deferral of tax on $10k, worth what? $600 per year of deferral? And, if Demorats are elected the favorable treatment will probably go away because they hate favoritism for capital gains. So you might defer 15% tax to pay 40% in three years.

If he titles the house in mom's name by gift (no gift tax this year due to unified credit) , she has lived there for the right amount of time, can she exclude the gain entirely under Internal Revenue Code Sec. 121? ($250,000 exclusion).

The only problem being did mom really own it even though it was titled in his name? He held title as "trustee" for mom and she reports and excludes the gain?

On this forum I doubt anyone will be offended, but if you go to the general public you might want to rethink letting the prospective buyers know that you are ready to insult them for being Looky Lous or doing some "funny business."  And, saying you don't have to sell or want to do so promptly apppears disingenuous. This will not get you where you want to be i.e. with a buyer. For my part, I wouldn't call anyone who started out with "don't waste my time." Your the person who wants to sell and pre-qualifying your prospective buyers and yourself is really not a sound approach.