All Forum Posts by: Christian Malesic

The old fashioned way. A nice, medium priced dinner for two. Tickets to the big game in town. Gift certificate to his favorite golf pro shop. A case of great wine.

Whatever will work for him.

There is no hard & fast rule. But, us AmerIcans we want one anyway don't we?

When your LLC is bringing in annual Total Income of $2 Million plus, is solidly run by normal GAAP standards, and has 5 + years under its belt, you can STOP giving commercial guarantees.

I have read lower, I have read higher. I had this exact feeling of exasperation years ago. I remember even saying to my banker (as a 20 something CEO of a brand new corp), "does Bill Gates have to guarantee loans for Microsoft."

Oh to be young(er) again.

If only to take the fool out of my own words.

We have done a few total gut outs due to poor layout or just plain updating needed.

It comes down to how comfortable do you feel with the construction process? My bro and I walk into a place and immediately discuss how we will blow out this wall and expand that bath, etc. Let's say it definitely needs floor covering and paint, so you will not be disturbing good stuff.

If the layout is funky, but is ready to rent (always with at least some minor maintenance issues) then the discussion is the same, but the action is delayed until some time way down the road. Meaning we will buy, rent out, and take a long term planning and remodeling approach: a new door here, a window there, a kitchen at year 2, and a bath at year 4.

As long as the #s work and you have the construction folk to do it -why not? Be sure to factor it all into your offer.

Spend the time & the money and do it right out of the gate.

I waited until we owned about 17 units in 8 buildings as a regular old ordinary partnership. When I created the entity (an s-corp), I had to sell the properties from the partnership to the s-corp entity costing me over $10k in Realty Transfer Tax (I understand PA is one of the worst states in the union for this with the tax rate at 2% of market value or sales contract, whichever is higher). I also incurred legal fees and title insurance, plus filing fees at the courthouse....

All just to sell properties from a version of ME to another version of ME.

(But Remember, when you create a legal entity, it really is not YOU anymore. It is like having a baby... it grows up. It looks like you, acts like you, even does what you tell it to do... Until one day it gets so big that it starts listening to what others tell it to do; such as HP, or McDonalds, or Home Depot, or Dell - get the point? I hope you have that much success.)

There are plenty of good books in the biz section of your fave bookstore or go public at library if you are feeling cheap. Study up. Prepare your notes. Become an expert. Ask around here. Then ask the real experts (not here) - the ones you pay that are beholden to you in your state.

From a tax point of view, both have income flow thru the entity to the owners. Thus, the entity itself is not taxable, except in odd situations and depending on state laws.

From a liability point of view, both take the liability off of you personally AS LONG AS YOU FOLLOW THE RULES. This means, in sophomoric terms, if there is a slip and fall at one of your properties, the best lawyer in the world can take your biz and properties for all their worth, but he can not touch your jet ski, home, car, savings account, etc. We could go on for pages here, as this is the topic of a major portion of many college courses entitled Business Law or the Legal Environment of Business, or such. In a nutshell, we must treat the business as a business. Have a Board of Directors that has real meetings and shareholders meeting for the corp., take notes, publish minutes, treat owners as owners not as employees (although they may be that as well).

Accountants for the REI biz, generally see them as 6 of one, half a dozen of the other. Lawyers often the same, but ever so slightly prefer the LLC.

That said, I chose the S-Corp. Why? For me it was because I own another S-Corp and am familiar with the rules and the methods of keeping the corporate veil from being pierced. I did not want to learn a new game, even though they are very similar.

As always with these things consult your attorney and your accountant. I actually spoke with both by phone on the subject, prepared my questions & comments, then had a pow-wow with both at the same time in the same room to hash it all out. It the end, they just provided pro & cons. I had to decide what things I cared to protect the most and how I want to operate. Then I made the decision.

This is absurdly false. Residential wiring is much more involved and code intensive than commercial wiring. It is very easy to make a residential electrician into a commercial, but very difficult to go the other way. It makes logical sense, too, that the residential code would be more forebearing.

Most electricians actually do not know how to wire, or repair the electrical, in a home. They have done commerical all of their lives. The apprenticeship curriculum of federally recognized programs cover less that 1 semester (less than 1 of 8) on ressy wiring.

I am not here to toot my own horn, but this is my world. I live it. And, am proud to contribute my knowledge to this forum.

Some of my credentials (very briefly):
Electrical Engineer from Lehigh University
Licensed Journeyman Electrican
President / CEO of CM Squared, Inc. (Full Service Electricians)
President of Central PA Chapter of the Independent Electrical Contractors
Past Apprenticeship & Training Chair of IEC
Nationally Acclaimed Instructor for the NAHB

PS - I am not here seeking work and only work in Central PA

As the President / CEO of a contracting business (full service electricians) in Central, PA and an instructor for the NAHB (National Association of Home Builders) I offer the following. You can have 2 of the following, but never 3:

Price
Qualilty
Customer Service

That last category covers: scheduling the job, making you a priority, showing up on time, working a full day, manning the job, calling to brief you, professionalism of forms & processes, meeting your deadline to finish the work, etc.

The prob in the REI business is, by default we always look to Price as a must have, leaving us to determine which of the other two can we deal without - not realizing that time is money and how much more important Quality & Customer Service issues can be. Price should be our lowest priority (within reason, of course) and we should be willing to pay for professionalism and quality up front, rather than paying on the back end by delays, poor performance, inspections that will not pass, etc.

If You Can't Afford to Do It Right... How Can You Afford to Do It Over?

My Clark Kent to my REI Superman is running an electrical contracting firm.

14 Amps needs a 20A breaker. The NEC (National Electrical Code) calls for 80% load calculations for safety; thus, the dishwasher (assuming the 14A is correct as read from the nameplace of the appliance) should be the only thing on the circuit, which is standard practice anyway (80% of 20A is 16A).

A 20A breaker requires 12 AWG (12 guage wire). 16 AWG is lamp cord and is NEVER used in home wiring. Many electricians do not even like to use 14 AWG, though it does meet code for most of the home circuits.

I have found the Small Biz Admin. is not great in the biz plan writing tools, but they do provide a nice start, outline, and thinking points for someone with little to no experience in this area:

http://www.sba.gov/smallbusinessplanner/plan/writeabusinessplan/index.html

As a Service Disabled Veteran myself (just recovering from my third knee surgery), I certainly realize how difficult it can be to get around at times. Thanks for the good advice from all.