All Forum Posts by: John K.

I searched and so much came up about LLCs vs Personal I couldn't find anything with my exact question.  

I all ready own a bunch of rental properties as an LLC with one partner (family, been at it since we were young). I'm considering moving from my primary residence into a duplex or 4-unit property as - and moving after a year. The property would have to be personally in our names. Can we collect all the rents as our LLC, and even though our names are on the deed / mortgage just add it as another property in our LLC portfolio? I know for the first year using a 4-unit, any common expenses would only be 75% towards the rental and 25% not tax deductible for the owner occupant.

2nd - If we rent out my current house (been here for over a year), can we also do the same thing, basically treating it as another property in our portfolio, and collect the rents as the LLC, add it on our balance sheet as LLC, etc? Even though we wouldn't mess with the deed?

Or is there anyone that has been owner occupied, planned on moving after a year and somehow just "paid rent" at cost, so the full property for tax purposes would be considered a rental out of the gates to keep things cleaner?

End of the day, rentals are about making money and I just want to move - which is why we are thinking about this. At the same time everything inside our LLC is really clean, always get kudos from business banker with how well organized and detailed our books are, etc. With other business related items, taxes are all ready a mess (had a 153 page tax return personally) and would love to avoid an additional schedule E mess with partial ownership. Wrapping it up into our biz return and K-1's (as pass through income), and just overall "portfolio" of rentals and operating it just as another property would be way easier, even down to all our templates forms, etc.

I've met other investors who are 10 year rental property veterans and don't even know what depreciation is. I'd say if you haven't ever taken an a accounting class in your life find a pro who knows how to do it right. 2nd - go take that accounting class at a community college even if you hire someone, if you think a profit and loss statement is how much cash you are putting in your pocket all the more reason to. Even using turbo tax if the numbers don't make sense and you don't understand what it's doing - think of how hard that's going to be to explain during an audit!

In Madison tax rates stayed almost the same but the property values are going up like crazy - so thus taxes are too along with the values

Does anyone use any remote monitoring systems that are really affordable (like a couple bucks/month) that use a cell network and not need a internet connection for tracking temperature of smaller apartment buildings?  I'd love to monitor the basement temps and get alerts but hate to spend a ton of money on it.

No or bad financials and poor management = potential big reward / opportunity (or loss). Estimate high expenses, look at condition of items (furnaces/roof/etc), and do your own rent analysis. Many times bad managers/owners won't raise rents since they don't want to deal with turnover. Can be huge opportunity to buy low and raise rents within a year or two to market giving a property excellent cash flow.

Checkout your local apartment association - best way to find local resources and they often have events where many of the members who are in legal / professional careers attend.

Side note on the issue: if you have the admin overhead and systems in place, I'd suggest looking at paying the resident manager instead of discounting rent. Mentally people treat it more like a job and don't just become accustomed to paying lower rent.

The only reason I would say not to pass on it would be if it was an excellent buy. Another option if local/state law allows is just put your own water meters on each side and get one bill, and based on usage bill it back (in new leases). Paying water as a landlord is like flushing gold down the toilet. Some tenants will use a very unreasonable amount.

We started using SFIC Cores- they change extremely fast, and since it's a standard it's easy to get locksets for any door. It also makes it so you can truly key the whole unit with one key, including things like sliding patio doors. You can keep a few extra cores on hand, and when a tenant leaves just switch them out. Same goes for turnover - switch it out to a cleaning core. Also works well with masters and since many of the keyways are not standard places like Home Depot won't be able to copy the keys. You can do sub-masters for small multi family and the sky is the limit.

Does anyone have experience with Rent Monitor as a software platform for managing units and collecting rent (current users)?  It sounds like it use to be a little clunky back in the day, but has improved - but couldn't find any recent discussions on BP about Rent Monitor specifically.