All Forum Posts by: Johnny Weekend

The property tax each half of the year for 2021-2022 was slightly over $2000. This was rolled into an escrow account such that I paid my mortgage lender part of this each month and they issued a check twice during the year to cover the 2 payments. The last payment was sent June 2022 prior to the July deadline and at that time the lender confirmed that was the correct amount. I called the treasurer's office this week to ensure they received the second check. They told me that the school board filed a complaint and my 2021-2022 property taxes were increased to $3,500 each half of 2021 effective 1 day before my final payment was due. This includes the 6 months period in 2021 prior to me closing on the property.

This retroactive increase in property taxes seems unethical and underhanded at best. If anyone has any similar experiences and advice on how to handle it or referrals to real estate attorneys or others who can assist, I would appreciate it. Thanks!

1 Vote

Dayton, Ohio

Originally posted by @Andrew Weiner:

Are you investing in a specific city? If you are going to start a relationship with a lawyer you might want to find someone that is working in that area in case you need them for property specific matters later on.

Currently in Dayton but might expand.

0 Votes

Originally posted by @Brandon Sturgill:

@Johnny Weekend the LLC articles are cheap...I'm assuming you are out-of-state. Why do you need an OA? Is this a partnership?

https://bsportal.ohiosos.gov/(...

I might be wrong but I thought an LLC would need an operating agreement to make it more legit. Not a partnership, more so for a liability standpoint.

yes, out of state.

0 Votes

Looking to create an LLC in Ohio for an investment property. Any recommendations for an attorney to help create the LLC and provide the operating agreement?

thank you

1 Vote

Originally posted by @Eamonn McElroy:

I am a tax CPA with clients that are residents of CA and/or have business activity in CA...I'm speaking from both experience and evidence.

California FTB Pub 3556:

California defines doing business as "actively engaging in any transaction for the purpose of financial or pecuniary gain or profit" (R&TC Section 23101(a)). An LLC is "doing business" if any of the LLC’s members, managers, or other agents performs activities in California on behalf of the LLC, regardless of where the LLC otherwise conducts business.

I presume you will be a managing-member of the holding company, and a manager of the lower tier entity. Therefore, as you are resident of California, both of the LLCs will almost certainly be doing business in CA and have nexus regarding the CA annual LLC tax.

Understood. Thanks.

0 Votes

Originally posted by @Eamonn McElroy:

What we seem to disagree on is what the "right track" is. You've been sold that a holding LLC, with a lower-tier LLC for each single family rental is absolutely necessary for asset protection.

If you're really serious about asset protection, engage an asset protection attorney. Plan to spend a few thousand, it will be well worth it. Don't base decisions on the suggestions of a company that *specializes* in selling WY LLC holding structures.

But if you do go down that route, I'm sure the companies in the OP will be happy to take your money.

And, CA will be happy to take $1,600 each year at the outset, and $800 more for each LLC you add.

Just don't forget to file your CA 568s and pay those taxes. The statute of limitations never closes on a tax year that was never filed...

Is that asset protection attorney starting to look pretty cheap now?

Best of luck.

Are you sure about the bold part I highlighted? The whole point of the holding LLC is the avoiding paying the extra $800 per every new LLC. I see that you are not based in CA, so are you talking from experience or evidence (which is what I am looking forward) or from a hypothetical ?

0 Votes

Originally posted by @Eamonn McElroy:

Listen to Chris. A multi-tiered entity structure for one single family in Ohio is beyond overkill.

Even one LLC may not be necessary.

I am planning on acquiring more properties in the future so I want to get on the right track now.

0 Votes

Originally posted by @Christopher Smith:

All that overhead for a rental in Ohio?

I've had many rentals in CA and Ohio for over 20 years, solid liability insurance for the properties and umbrella insurance for outside risk (if/as necessary) has been way more than adequate and worlds less administratively burdensome (plus you don't pay the annual $800 fee for each LLC you own that carries on business in or out of CA as almost all do under the incredibly wide scope of CAs franchise law).

Sounds like they are selling you a real Rube Goldberg special, one that's likely unnecessary for basic small landlord activities. Such a structure is one heck of an administrative burden for what are risks that can be much more easily and economically addressed by insurance.

Have they been regaling you with lots of over the top liability horror stories? As noted I've done this for over 20 years and know many others who have also been doing this for decades. Have yet to meet one conscientious landlord that's ever been sued for anything other than a relatively rare security deposit challenge where the dollars amounts are at most a nuisance issue.

I appreciate the reply and realize the risk is low nonetheless I am interested in pursuing the LLC and holding company structure (or something similar if there is a better option).

0 Votes

Hi everyone,

I read a few posts on LLCs and holding LLCs and wanted to dive a little deeper.

I live in CA but own a single family house in Ohio. I contacted Corporate Direct and Wyoming LLC Attorney (that's the website name) and both recommend I form an LLC in Ohio then a holding company in Wyoming given their favorable laws. The Ohio LLC would help protect against attack number 1 (tenant suing) while the Wyoming LLC will help protect against attack number 2 (personal liability). An added bonus it sounds like California I would only need to pay franchise taxes for the holding LLC even if I have numerous additional LLCs. Does that sound accurate ?

Also, initially I thought about Delaware Statutory Trust for asset protection but it seems that a LLC for the property and then a holding LLC will accomplish the same?

Also has anyone used Wyoming LLC Attorney to form the holding company? They are much cheaper than Corporate Direct and seem to provide the same documents.

Thank you!

0 Votes

If you are dealing with local investors they will want to walk the property because it is easy. It will be dumb not to if you are close by. However if you are dealing with investors that are out of state then they likely won't walk the property.

3 Votes

All Forum Posts by: Johnny Weekend

Johnny Weekend has started 16 posts and replied 37 times.

Post: Unethical property tax increase, Dayton OH

Post: Looking for Ohio attorney to create LLC & and operating agreement

Post: Looking for Ohio attorney to create LLC & and operating agreement

Post: Looking for Ohio attorney to create LLC & and operating agreement

Post: LLC and Holding LLC vs DST ?

Post: LLC and Holding LLC vs DST ?

Post: LLC and Holding LLC vs DST ?

Post: LLC and Holding LLC vs DST ?

Post: LLC and Holding LLC vs DST ?

Post: "Investors" walking property, what's your take on it?