All Forum Posts by: Lynn T.

Great Metro Area to invest in. Lots of wholesalers in Atlanta. Make sure you are on their buyer's list. You may get lucky. But do your own number, don't use theirs. With your budget you may find a seller financing deal where you can fix up a little bit, your money will go further than buying from turnkey providers. Just my two cents.

1 Vote

@Eric Skyta

@Eric Skyta It sounded like the building is under rent control given the situation and where it is located. you cannot raise the rent to the market rent. You can raise the rent up to however much the rent board allows annually. If there is banked rent, you can raise those too.

For especially tenant-friendly like San Francisco, apply extra knowledge around tenant's right before acting. You should buy based off of the current cap rate, not the pro forma in this case because of rent control.

1 Vote

Originally posted by @Ali Boone:

I wouldn't ask anyone other than your accountant (hopefully a real estate friendly one) for what the different options would entail and how best to do it. No offense to anyone on here, but if someone gives you even a smidge of bad advice, you could have a lot of trouble. Even if an accountant chimes in on here and answers, they don't know your specific situation financially and otherwise so I still wouldn't make a decision based off what they say. This should be a conversation offline with your accountant.

I agreed. It didn't incur to me to talk to my CPA. Thanks for the tip.

0 Votes

Originally posted by @Costin I.:

@Dave Toelkes is correct - another way of saying the LLC is a legal entity with no particular tax benefit. The difference between Series LLC and regular LLC is that you will have to open, maintain and file state and/or federal tax for each individual LLC you have (and often that goes one-to-one with properties, unless you want to deal with properties per LLC distribution issues), vs. just one for a Series-LLC. Of course, Anderson will be glad to sell you another LLC when you get a property; with a Series-LLC, you just issue an internal document and you have a new child Series-LLC to use.

I think Wyoming LLC has an additional layer of anonymity/privacy - Wyoming does not require the manager nor the members of a Wyoming LLC to be listed on a public database. But that might be moot point if you have the living trust on top of it.

And both might be moot to you, since you are in California and LLCs are very expensive in CA ($800/LLC/annually). I think there is another option - Delaware Trust - that might be a better option for CA investors (but also more complicated/expensive). And for that, you need specialist help.

But before you go for complicated and expensive entity structures...do you need them? Do you have that much equity (not property) and/or cash flow to protect? Or other personal assets not covered through homestead and otherwise? Have you covered all the other aspects of risk mitigation? Do you do your own property management or outsource all operations? Here is a diagram to help you with these questions:

Thanks for great inputs here. This subject is very comprehensive and this chart is very helpful. It seems like I will have to ask more specific question to the lawyer and cpas. Thanks for a great tips. Do you have Asset Protection entity set up yourself?

0 Votes

Originally posted by @Dave Toelkes:

Originally posted by @Lynn T.:

Hi BP,

One of the thing that sounds attractive is that when comes time to file the tax return, this system allows investors to file with only one entity, which is the TX Series LLC.

Lynn

Lynn,

the IRS sdoes not recognize the LLC as a tax entity. When you establish the LLCs, you will be asked to designate how the LLS is to be treated on you federal income tax return. Your options are corporation, partnership and disregarded entity (which is the same as a sole proprietorshipO.

If you elect disregarded entity, and if the LLCs are solely engaged in a rental property activity, then as far as the IRS is concerned, you would report all the rental income and expenses on your personal Schedule E (1040) as if the LLCs did not exist.

David - Thanks for a reminder. I reviewed my tax return and found that I did choose to disregard the entity, however, I still have to file 1065 Form and K-1 which cost me $350 to have my CPA do. I will check with my CPA on this. Thanks for your opinion.

0 Votes

Hi BP,

I am very new to entity world here. However, I have recently been looking into asset protection for our rental properties.

Two companies came up 1) Andreson Advisors 2) Royal Legal Solutions.

Anderson set up a holding company in Wyoming which owned by a living trust. Then each property is individually owned by individual LLC that owned by the WY holding company.

Royal Legal set up a Series LLC in TX which owned by a living trust (I believe), then each property is owned by individual LLC that owned by the TX Series LLC. One of the thing that sounds attractive is that when comes time to file the tax return, this system allows investors to file with only one entity, which is the TX Series LLC.

Both companies have estate planning and SOLO 401K offered which is the same. I'm just more curious about WY or TX - what really are the differences in these two if any?

If you have experience about entity set up - please chime in :)

Lynn

1 Vote

RSVP'd. David - great job on the podcast. Love your comment and how you narrate the show.

1 Vote

Ian,

Time, Resources (deal), or Money, which one do you have? If you don't have the capital to start, can you find the deal and put in sweat equity to make it work. Sort of House Hack + BRRRR would be able to work as well. The FHA loan house hack is a great way to start especially in the area you live in because they are still within the FHA limit (I believe) We need a lender to confirm. Good luck.

Lynn

0 Votes

Hi Missy,

I did convert my 2/1 into 3/2 (addition within envelope in the basement). It was one the best decision we have made. We lived in our house during renovation. I think that if you have a choice of making it into a third bedroom and private bathroom with its own entrance. You could also consider short-term or furnished rental if you so choose, that would give you back the highest return. The reason is that you will likely pay a marginal more for property taxes after you renovate, marginal insurance premium increase, tiny bit more utilities, and that's about it. You have then increased the value of your home (forever) by adding the living square footage and bedroom and bathroom count. And the ability of your home to partially be an investment unit.

If you want to discuss more, please feel free to DM me.

Lynn

2 Votes

@Scott Lyons hopefully the building you analyse on You can get financials from current owners and check their sources. Try call garbage company and verify. The cost should varies based on location, units and etc. legal fees (eviction fee) maybe necessary depending on the targeted area. Local REI is a great resource.

0 Votes

All Forum Posts by: Lynn T.

Lynn T. has started 9 posts and replied 83 times.

Post: Looking for my first deal in Atlanta and surrounding areas

Post: Owner Financing in San Francisco

Post: Entity Set Up: TX or WY?

Post: Entity Set Up: TX or WY?

Post: Entity Set Up: TX or WY?

Post: Entity Set Up: TX or WY?

Post: How to Flip a House- with David Greene

Post: Trying to get started in the San Francisco East Bay Area

Post: New from SF East Bay, CA looking for ADU/live in flip/travel tips

Post: Costs on a 20+ unit building