All Forum Posts by: KJ D'Costa

Hmm for some reason the tags aren't working and I thought I had that down. 

@Jeremy Tillotson 

@Jeremy Tillotson 

I'll take you up on your offer. Very much appreciated. You'll hear from me before the weekend.

@Laura Williams 

Thanks, Laura. You've confirmed my suspicion that my target Midwest cities aren't strong multi-family contenders. Back to the coast (East that is). 

@Chris Soignier 

Hi Chris, to answer your question my acquisition strategy is to rehab and rent, which is dictating my initial moves. I want to cut my teeth on SFH rehabs, before I tackle 2-4 units, then onto commercial properties. I'm completely with you in multifamilies, and that's the long term plan.

@Rusty Scott 

Can you clarify what you mean about your cost to obtain being lower and easier? Thanks.

The Midwest is great market for SFH rentals. However, my preference is for small, commercial MF for several reasons, but particularly for the commercial financing (pricier, but don't have to deal with DTIs and property # limits). (I wouldn't mind acquiring SFHs, but conventional financing is as pleasant as skewer to the eye & makes quantum mechanics look easy. Especially when trying to refi out of a rehab loan.)

So, I'm wondering if the Midwest is also a good market for these small properties (5-6 units)? Or do I need to stick to the East Coast? I have some assets, but want to stretch them as much as possible in more affordable markets. 

Thoughts?

Someone bought it for $135k. I hope owner-occupied. 

Thanks for all the replies.

I wasn't considering a 1031 because it doesn't fit our strategy. 

@Bill Walston  and @Steven Hamilton II I hear you loud and clear, but can you detail what is so detrimental about holding investment property in a C Corp? That means that only business structure that's smartwould either be an LLC or a land trust for each separate property?

Anyway, I was hoping that there was some time of business structure that would take into account that flip profits would be turned around and used to purchase assets and not be spent as personal income. Hurts so bad to think that 40% is going to the tax man...sigh.

I have few consultations lined up next with tax attorneys. I'll post the results.

We're starting our flipping business this year in order to fund our buy and hold strategy. And I understand that income from rehabs/flips is taxed at the highest level. However, we intend to use all profits for the purchasing of our long-term holds. I'd like to keep as much as we can using a corporation. Is this following feasible?

Set up a corporation, with minor payroll of the owners, but keep a majority of the flipping profits with the corp. and have the corp. then purchase the buy and holds. 

Will that reduce our tax liability? We have every intention of getting direct legal counsel, but wanted to vet the question on the forum first.

Thanks for any input!

I'm currently reading What Every Real Estate Investor Needs to Know About Cash Flow... And 36 Other Key Financial Measures and while it obviously covers cap rates quite thoroughly, you've added additional, very valuable details. Thanks!

I'm sure it's possible, but is the criteria the same in terms of LTV? Seasoning required?