All Forum Posts by: Kevin Chan

@Kyle Reedstrom I currently have a short term rental that went live 1/1/20.  We are booked through May and after estimated expenses (including summer utility bills) we are looking at an average cashflow of around $800.  

Generally, I prefer the Series LLC. It was first created in 1996 in Delaware, over two decades ago.

Understanding the Series LLC is a great starting point for understanding DSTs. Both use a parent-child structure and have infinite scalability, offering creative solutions for investors.

California investors have special concerns because of the state's laws and tax regulations. While a Series LLC presents an ideal solution for investors in every other state, it would incur an $800 franchise tax at the very least.

The Delaware Statutory Trust is a great alternative, because it offers a similar level of protection to the Series LLC while also avoiding this tax burden. The state views DSTs as estate planning tools, which do not have to meet the same requirements as corporations or LLCs. Any investor who is doing business in California may be subject to state taxes.

One thing to watch when using trusts in addition to their protection afforded, is revocability. The DST is revocable which helps in adjusting for business conditions, where some trusts are irrevocable. That being said, it is best to look at the individual goals of the investor to decide whether to use a DST or LLC.

@Cedric Ballet I hear what your saying, although 800 dollars multiplied by a few dozen properties, annually, does add up. Once it's set-up it is rather easy, as it's considered a "disregarded entity" by the IRS. The biggest hassle has been refinancing once the property is in the land trust. I found its best to just temporarily move property out of trust, refinance, and then move it back in.

@Kevin Chan haha ignore the Big Bear vs Arrowhead:) was mixing this thread up with another. YES lots of competition in Big Bear over 6k properties listed and to self-manage and make money you have to be really, really good ... there is a reason why platforms have algorithms to show only 'top' homes. With that said the market for 6+ bed near Summit is $700k+. We were looking at 3bd in Moonridge and Summit, and also Arrowhead. Basically if I had to gamble I would do it in Arrowhead, my personal preference.