All Forum Posts by: Joshua Davies

Are there any tax attorneys/CPA’s on BP with international experience? I am setting up an LLC for rental property investing with 2 partners from the UK. I am under the impression that the LLC must withhold 35% as it has foreign members. However, what happens if we show a passive loss on our balance sheet after deductions and depreciation? Also, how would the members be able to take their draw from the LLC in this scenario? Will the IRS allow members to take draws from an LLC that shows a loss? Would the members also then be taxed again on the draw? I know there is an existing tax treaty between the US and UK but I do not have any detailed knowledge on this. If anybody can help out on this that would be great! Thanks!

Hi Everyone, I am close to submitting an offer on a duplex in Middle TN - I have ran the numbers in detail and they fit my criteria. The only cost I am not entirely sure on is the insurance - this will be my first investment property here in the US. If there are any investors out there in this area that could provide me with a rough estimate on insurance costs? I have a couple of insurance agents working on quotes but would like to get an idea of what other investors are paying so that I can compare. The property is a Duplex built in the 1920’s - I would be interested in insuring it for cash value and not rebuild value. Thanks for any input!

I also work with a lender who allows title to be transferred to my LLC. It can be done, I would just ask the lender to give you written approval of the transfer before committing.

Hi Everyone, I am looking for advice regarding my current situation. I am ready to purchase a deal with a partner, however we have hit a bit of a roadblock. I am a current US Resident but my investor partner is still in the UK so has requested that we form some sort of Legal Entity before we start acquiring properties. From my understanding, we will not be able to obtain financing for a newly formed LLC and transferring the properties into an LLC after purchase will trigger the “due on sale” clause - although I have heard that many lenders will not care too much about this. I have also heard that I can personally back the loan for the LLC which I don’t mind doing. Are there any other legal partnerships/contracts we could create to state that my partner has an equal stake in the properties? What are my options here? If anybody has any advice on this it would be much appreciated.

@Brian Burke what sort of returns are you looking for? Is your primary goal cash flow or appreciation long term? I am from the UK originally but also reside in Orange County so have been looking to invest out of state. I have identified a couple of decent markets over the past few months. Send me a PM if you are interested in connecting!

Thank you for your input everybody, much appreciated! I don't necessarily mind still having money into the deal, I was just looking to pull out enough cash to use as a down payment for my next purchase. I currently have enough cash for 2 purchases and just figuring out my best strategy. I am also looking into HELOC's and how they could benefit my situation.

Thank your your reply Andrew! So am I right in thinking the below: Purchase price: $80,000 Original loan: $54,000 Rehab: $10,000 ARV: $110,000 Refinance: 70% of $110,000 = $77,000 $77,000-$54,000 = $23,000 Could I pull out $23,000 from this refinance? Or am I missing something? I am only trying to pull out enough cash to put a down payment on another property. Thanks for your help!

Hello BP! I have a question regarding the BRRRR/Cash Out Refi method. I understand that most investors using the BRRRR method are buying the properties with cash. However, I was wondering if it is possible to use this method with a conventional loan? I realise that most lenders will do a cash out refinance on a LTV of 70%. If I purchased a property (currently analysing one) for $75,000 with 25% down (loan amount around $56,000) and the ARV came in at $110,000 could I pull out the difference? Any help on this would be much appreciated! Thank you!

Hi, I am currently looking to purchase 2 rental properties and have 2 investors that are funding the down payments for 2 separate properties. After learning that you can’t get conventional loans for LLC’s we have decided we will keep the properties in my personal name and purchase an umbrella insurance policy. However, I currently do not own a primary residence, which I would like to later this year. My problem is that if I purchase the 2 rental properties and in 6 months I want to purchase my own home my DTI may be too high. The 2 investors are both from the UK so do not have any credit history here in the US but are cash wealthy in the UK. My question for lenders is, are there any ways to include my investors credit and cash on the purchases so that they will consider both of us on the loan? And if the properties are cash flowing and profitable, would this be taken into consideration when I come to purchase my own property? I don’t want to shoot myself in the foot by purchasing rental properties and then not being able to buy my own home. Thank you!

Chad P. Thanks for your input! Do you currently have rentals in middle TN area or are you investing elsewhere? That’s good to hear about the PM, a great PM is essential for my strategy.. I would love to connect!