All Forum Posts by: Jeremy White

I'm tied up most Wednesday's with a standing commitment but will try to attend when there is a gap. Would love to meet some local folks, very happy to hear this is beginning in Burlington! 

@Ashley Gish If cash flow isn't an issue on the debt repayment, then you should definitely look at a refi. Some people can't refi because they have income based repayment, but it sounds like you are financially stable enough to be able to term out your loans and handle the payments. I would do this no matter what you decide on paying them down vs. investing. 

The decision to invest or not depends on your personal risk tolerance and how you feel about debt. I know what Dave Ramsey would say, but he doesn't see things the same as a lot of us do as he hates leverage but we love it. 

I would refi, then invest in property but that's just me. 

I agree with the others. LLC in general isn't beneficial (talk to an attorney to confirm for your scenario), don't use a prior LLC, and definitely get the umbrella policy on top of the regular liability on the property.

@Eric Shadowens fellow tax preparer here. One thing I do is make mental notes of clients who have real estate investments in their tax returns. Then I try to strike up a conversation about it during the offseason, they always love discussing real estate and it has opened doors for me through people I already knew but never considered in the past. 

Good luck!

Danville is a rough market, very economically depressed. I know several investors there who do ok, but you just need to have realistic expectations. Definitely not a town I'd call growing or in the path of progress. 

Not true. If your business was losing money, you probably wouldn't be paying yourself anything and may even be investing additional funds to keep things going. Business owner gets paid last, at least in every business I've ever run. 

Also, if an LLC with disregarded entity status, you don't actually pay yourself w-2 wages. You are just taxed on the profit of the business. Again, probably a good idea to hire an accountant to sit down with for a consult and discuss these things to be sure you are compliant and understand how to optimize your tax position without crossing uncle sam.

Good luck! 

@Travis Houck Maybe worth mentioning that you generally have to be an accredited investor to invest in a syndicated deal. You may know that but I don't want to make assumptions.

Also maybe worth mentioning that @Brandon Turner and @Ryan Murdock are launching a fund soon and have begun marketing that a little. Check that out if you are interested in the mobile home park space. 

I recommend you run the numbers yourself and ask a lot of questions before getting into a deal. If you don't understand the asset class or the numbers, it's probably better to not invest or at least find someone you trust, maybe a mentor or someone with some experience, to help you vet the deal. 

I would definitely pay FMV for rent, but that can be a little subjective. It's best to consult with an independent 3rd party such as a commercial real estate broker, or do your own research for cost per sq/ft for similar space to yours. You need to be prepared to justify FMV if you get audited. As long as you can do that, you should be ok.

As far as taxes, you are correct that rental income is not subject to FICA tax which is a significant savings. I would still advise you to take a reasonable salary as well that is subject to SE tax. This can all be a little complex, definitely consult with your tax preparer prior to making any of these changes to get their input but you are thinking in the correct direction to minimize taxes, as long as it's structured properly and well documented. 

I've had good luck just using lowes for the LVP. We recently re-did our office in Burlington using them and there were a few small hiccups but their service was good and the followed up well to resolve the issues (a few pieces popped up a little, should be easy fix). We carved this out of the GC work and saved substantial dollars on the bids. If you're on the east side of GSO, shoot me a message and I can connect you with a couple of handymen who can do a large portion of this work for you. 

I think you mentioned a management company, is this something you are starting to do for other investors in the area who may be out of town or even local but looking for more passive approach?