All Forum Posts by: Joshua Knapp

I strongly suggest strong asset protection through the use of legal entities such as LLC's. An umbrella will do nothing to protect you in the event someone brings suit. While umbrella policies are a great idea, you need the legal protection an LLC provides. My advice and take it for what it is, establish a holding company in Wyoming, Nevada or Delaware where asset protection is strongest. Establish the property LLC's as a subsidiary of the holding company. If you really want to build strong asset protection, have the holding company then pencil up to a trust. I would not recommend any asset staying in your name. An LLC provides a corporate veil of protection to you. Yes it's true, by transferring deed from you to an LLC could trigger a due on sale. However, go ask an asset protection attorney how many times that's actually happened. A risk worth taking in my opinion. The alternative is leaving yourself exposed and say someone brings suit to you personally which has ramifications for anything in your name. Conversely, if someone were to go after your property and you are listed as the owner, you would be exposed personally which means anything in your name including bank accounts. Protect yourself.

@Michael Plaks

Yes this property is new and is in service for 2020. I am just upgrading appliances and some other items and would like to take these deductions against 2020 income. Thanks for the breakdown.

@Eamonn McElroy

Thank you for that explanation. I am using a cash accounting method and the unit has been rented out and placed in service for 2020, I am just upgrading the appliances and countertops.

To take expense deductions for 2020 on a new property being used as a b/b such as appliances, furniture etc, does the receipt need to be dated in 2020 or can it be dated up until filing deadline of 4/15/2021?

@Łukasz Juraszek

Couldn’t agree more. I feel like I’m chasing rainbows. Really tough to find a deal. There is so much competition and buyers coming in with cash. I think finding a way to tap into off market deals could be the secret sauce.

@Łukasz Juraszek

That was a good question though! I’m still learning myself. It has really helped me to look at properties real quick and know if they’ll cashflow. Almost nothing in Phoenix that I’ve seen meets the rule so I don’t bother analyzing unless I feel I can add value to increase rents.

@Łukasz Juraszek

I think more of what that is intended for is a rule of thumb. For example, I look at properties all day. If I stopped to analyze every single listing in detail I would never get anything else done. I use the 1% rule to help guide me to see if a property is worth looking into it further. Generally speaking, if your math falls under 1%, the property might struggle to make decent cashflow. But that’s all relative to what returns you’re looking to get. A 3% cash on cash return such as the example you provided, would not be attractive enough for me to dump $500k in. So using the 1% rule would help me to quick do the math on that real quick to know this.

Looking for a Phoenix agent who REALLY understands this market as an investor and also invests themselves. Looking for a long term partnership.

Can anyone recommend a really good handy man in the Phoenix area who is responsive and does awesome work? I have not had great experiences so far and need 1-2 reliable people to go to. Thanks in advance!

@Eric Ruiz this is great. I’m out of Phoenix and am interested. I’m brand new and want to learn all I can. Thanks for posting.