All Forum Posts by: Jeff Stein

@Jalen Leichman

Renting out an extra room is definitely a good strategy to maximize the benefits of house packing. I would make sure you do a very thorough screening of your potential tenant to make sure things move smoothly. 

Another approach to take this would be to live in the second unit and then when your one year is up, you can rent the whole upstairs unit and your property should be getting good cash flow.

@Marc Estepa

@Bob Norton is correct. Any expense of the business counts. It is important to keep good record. There are many different options available. You can do it yourself or hire an accountant/tax specialist to help maximize your personal and business returns. Feel free to PM if you need any more help.

I have different equity partners in the 3 properties. Jaybird Properties LLC has 100% ownership of building 1, 95% ownership of building 2 (Jaybird Properties 2 LLC) and 70% ownership of building #3 (Jaybird Properties 3 LLC). I am looking to make an offer on an new office building which I will likely keep 100% ownership of and keep a debt partner so it will fall under my main LLC.

Hopefully this answers your question. I will not have 100 LLC's for 100 properties, but depending on debt vs equity partnerships in the future I may get more LLC's. The key to this is keeping different books.

I'm happy to explain any further if you have more questions.

@Rick Oaks

There are a number of different ways to do this. Do they own this land outright or do they have a mortgage on it. If the seller is open to it, you should get a lawyer and accountant to look at the trust to make sure there will be a step up in basis upon his mothers death. 

If they own it outright probably the lowest tax consequence would be to do seller financing with an option to buy if the owner changes. Such as a transfer from his mother to the trust in his name. Its doubtful that small payments right now would make much of a difference in his mothers tax bracket, but this may be a harder thing to convince them of. 

One important question I have is are your different properties under the same entity (LLC, S corp, C corp)? Or each building different? I currently have 3 properties each with a unique LLC. I was able to use quickbooks pro and list every expense under a separate group. This way It can generate reports for each of your buildings without setting up multiple quickbook accounts. Hopefully this answers your question, otherwise I'm happy to try to explain better.

@David Ramirez

I would be happy to set you up with my partner who has decades of tax and accounting experience. We are in the Milwaukee area but he has clients around the country.

@Ryan Winters

I would echo the voices who have posted here already. Having a college degree, especially one that is not making you go into debt has so much value moving forward. If REI is your passion, there are always opportunities out there. Why not reach out to this owner and negotiate something that still allows you to stay in school?

I would be happy to help you. My father has been in the field for 4 decades and has been helping clients across the country.

@Konnor Lange

There are many different ways to finance a commercial deal. I have found a lot of success with local banks. If this is your first deal many places will require 30% down. Some banks will get you down to 25% down if you have a track record or some relationship with them. Be advised that commercial loans typically come with a higher interest rate. It is common to get a 2-5 year loan amortized over 15-25 years.

Make sure you shop around as many banks have different definitions of what owner occupied will mean. Some need you to be in >50% of the building, other will be more lenient. The benefit of owner occupied will come with less money down required.