All Forum Posts by: Josiah B.

Hello, thank you both for the responses. How did you find them on the SEC? What company did you find that manages this fund? 

Hello,Has anyone heard of or invested with a group called IPG Fixed Income Fund or their IPG Fixed Income REI fund? They offer high returns (12.5-24%) for a fixed period of time (usually about 18 months). They pay monthly interest but it is hard to find much information about them and the actual fund manager.
Here is their website: https://ipgfixedincomefund.com

I have signed into their portal to get more information as well. 

They seem to be a middleman for underwriting some type of debt instrument for DTCC. 

Hi @Larry Fried , could I get the company that you have invested with? I am non-accredited and have some properties on my own but I would like to learn more about some syndications. Thank you!

@Nathan R. Cowger

Doing a cash out refinance should not result in a tax bill (income or capital gains) due to the “cash” you are taking out of the property is debt and will be repaid, eventually.You should be able to confirm this with your banker and an accountant.

You never pay taxes on debt. Even if you know its not really debt (in investors eyes). The cash you pull out of your equity should be paid back and will increase your mortgage thus being debt. Hope this helps! Great question!

Thank you for the response. That makes great sense! 

Hello! 

Using an LLC will make financing your property a bit more difficult. You will almost always need 20 or 25% down (unless you find a portfolio lender that is more flexible) and your loan term will probably be amortized over 15,20 or 25 years with a ARM at 3 or 5 years. Your interest rate will also be higher due to it being a commercial loan and that loan will most likely need to be personally guaranteed. Finally commercial paper, usually is "callable" by the bank, which means they can make the note due for most any reach with short (30-60 days) notice, although most banks only call a note if the personal is behind on payments, as calling notes "just because" is not a positive reputation builder.

Hopefully this helps with the LLC side and this is from what I have learned from just talking to all my financing banks.

Disclaimer. This is not intended to be financial, legal, tax, or any other professional advice, but instead is for educational purposes only.

Thank You, Josiah

Hello

Lots of people have their opinions about asset protection and what is best but their is a line in the IRS Schedule E form instructions that concern me about using the Land Trust/LLC asset protection strategy. Let me explain.

A popular strategy is to hold your property in a land trust (title) and then use a LLC (Wyoming LLC) as the trustee and then another Wyoming LLC as the beneficiary, both of which the investor owns. This sounds like a solid plan and have seen many people implement it but there is a section in the IRS Schedule E instructions that seems to possibly throw a wrench in it?

Under the “Passive Activity Loss Rules” there is an exception most small investors can take that allows the loss in their real estate can go against wages, etc called the “Exception for Certain Real Estate Activities.” Most small self managed investors can achieve the conditions (see below):

1. “Rental real estate activities are your only passive activities.
2. You do not have any prior year unallowed losses from any passive activities.
3. All of the following apply if you have an overall net loss from these activities:
   1. You actively participated (defined later) in all of the rental real estate activities;
   2. If married filing separately, you lived apart from your spouse all year;
   3. Your overall net loss from these activities is $25,000 or less ($12,500 or less if married filing separately);
   4. You have no current or prior year unallowed credits from passive activities;
   5. Your modified adjusted gross income (defined later) is $100,000 or less ($50,000 or less if married filing separately); and
   6. You do not hold any interest in a rental real estate activity as a limited partner or as a beneficiary of an estate or a trust.”

My question revolves around part f above. If you implement the asset protection strategy as described above, would you still qualify for this passive loss exemption due to condition f? Because you would technically hold a interest in an trust through your LLC. What if you had a property just in a trust and you were directly the beneficiary, then would you be disqualified for the passive exemption? I am really interested to see if anyone has any experience with this or another IRS rule that overrides this point?

Disclaimer. This is for educational purposes only, not legal, accounting, investing, or any type of professional advice.

Thank You, Josiah 

I have found that everyone talks about LLC's and holding companies but we never really seem to dive into what the proper "LLC Pyramid" should look like? I am hoping others can bring light into how they have set up their LLC's and why. Is it best to have a property (physically holds the property) holding LLC, then have a holding company that specifically owns the LLC's interest? Should the interest LLC be in or out of state (such as Wyoming or Delaware)? Then how have you set up your real estate pyramid when you have some properties wholly owned by yourself and others owned with partners? Do you have separate LLC's between the partner properties and your personal portfolio? Then are they tied back to an out-of-state holding LLC?

These questions (answers) can get expansive but I would appreciate hearing how you set up your LLC's and why? I look forward to the discussion.;;;