All Forum Posts by: Jason Morris
Jason Morris has started 4 posts and replied 40 times.
Post: Property Managers in Philadelphia
- Posts 40
- Votes 7
I was told by some investors and realtors that you/I should self manage your/my first property to maximize profit. Once you start building your portfolio to the point where your time managing is interfering with your time expanding then you get a property manager.
Originally posted by @Thomas C Veatch:
I'm an out-of-state investor from Seattle and my Pennsylvania lawyer did agree that my apartment purchase should be done inside of an LLC, but she didn't really care if I had a Washington state LLC doing business in Pennsylvania as a foreign entity versus a Pennsylvania LLC. State fees for LLC and entity maintenance are I think the main factor. For example once I had a California entity and it was 800 a year plus a state tax return which, really, you don't want to have to deal with that every April. Later when I moved to Washington the annual fee for an LLC, I found, was much smaller, like $70 or so. I should have shut down that California entity immediately because it was based there originally but no longer doing business there but ended up spending a lot of money on California entity fees. There are LLC registration jurisdictions like Nevada and Delaware etc. where it's not expensive or difficult to keep up with the paperwork to maintain the dang thing, but don't think you're getting away with anything because it's really a shell game: when you go to a different state to do business like to own a rental real estate investment there then you have to pay the local jurisdiction their foreign entity fee which is identical to the local registration fee for an entity which is exclusively registered in that locality. So I'm paying Pennsylvania's registration fee whether it's a Pennsylvania LLC or a foreign entity. In my case Washington state has no income tax on an individual person so an LLC is also not taxed at the state level because single owner LLC income is personal income. So there's no tax burden to having an entity in my home state to own properties wherever. And a little bit of flexibility for the future, in case my "empire" grows to be across different states. In any case I am required to register my Washington entity as a foreign entity doing business in Pennsylvania and also to have a Pennsylvania address for local service of process and that's my lawyer's address which costs a nominal fee every year.
If my home state had a high cost of registering there then I would just have my LLC be domiciled in Pennsylvania.
But I’m a plumber not a lawyer so your mileage is your own. So to speak
Did you purchase all cash or get a mortgage? I tried to close one of my properties in my LLC. The lender would to close the mortgage in my name, but put the LLC on the deed because the lender wanted a personal guarantor for the mortgage. The Title Company said this could not be done because of State Law. They said the deed and mortgage had to match. How were you able to do this?
I reside in NY, but have a Pennsylvania LLC. But if I am unable to close the property in the LLC, it makes no sense to keep it open.
Post: Good Tenants Hard to find
- Posts 40
- Votes 7
Originally posted by @Brendan Markle:
I invest in Kensington, Germantown and Frankford in Philadelphia and definitely don't have any problems finding suitable tenants. Maybe its just a low population area? I honestly don't know a whole lot about Erie
Do you invest above Kensington or below Kensington or both?
Post: Out of State LLC - Where to open Bank Account?
- Posts 40
- Votes 7
Originally posted by @Chris Erato:
Hi guys new to investing. I recently purchased 2 multi family homes in pa. I got the mortgage under my name. I opened an llc and would like to transfer the deed to the llc . Can I do that and if so do I have to pay any transfer taxes ...?
You probably already got the answer to this but yes. i had the same issue. I just left in in my own name.
Post: Out of State LLC - Where to open Bank Account?
- Posts 40
- Votes 7
Originally posted by @Daniel Kong:
Hello. So I live in Hawaii, but recently purchased a rental property in Indiana. I plan to transfer the property into my Indiana LLC. My question is, should I open my business bank account in Indiana, or can I register my Indiana LLC here in Hawaii and just open a business bank account here in Hawaii. Just wondering if there is any upsides or downsides to doing it either way. Thanks in advance!
I'm in the same predicament. What did you use as your business address?
Originally posted by @Gregory H.:
@Jason Morris I just want to make sure that you are aware that if you are managing property that is not your own, you are legally required to have a real estate license in Pennsylvania.
Thanks I did not know that, but yes they will be my own properties. My plan is to start up using my LLC as a property management for my own properties. Build my business credit this way then expand to property investment.
Originally posted by @Peter Roehrich:
My experience has been that for IDs, state of issuance isn't an issue. Those of us in the DC area do business across state lines all the time without problem. If you're concerned the state of issue will be a problem, how about you use your passport?
Thank you I never thought of using my passport instead.
Post: Do you sign up for Dun and Bradstreet (DUNS) Number
- Posts 40
- Votes 7
Originally posted by @Tom S.:
@Jason Morris Moving the property to an LLC will not remove it from your credit. Your name is on the mortgage as you personally guaranteed it. Even if you first closed in an LLC, all banks will still require the PG.
Also if you're keeping it as a rental, the LLC takes no difference as it will still be reported on Sch E of your taxes.
In the future you can consider commercial loans that don't report to credit agencies (or owner finance deals). I have a lot of mortgages like that. So credit score wise nothing is showing. However when applying for another mortgage, it still shows on my tax returns and you have to disclose it in the personal financial statement lenders require.
Hope that helps,
- Tom
OK. That was informative. Thanks.