All Forum Posts by: Mark S.

Hi Nicholas, 

Last question. Upon establishing a partnership agreement, would the deed to the subject property need to be changed, or could it continue to be held in my personal name? Just concerned about it triggering a due on sale clause with the bank, not to mention transfer taxes.

Thank you very much for the assistance. Much appreciated.

Thanks again. So I would have to file a Form 1065? Could I get away with a Schedule E Form 1040 and just report everything at 50%?

Thank you. My friend is not on deed or mortgage. The agreement was to just split everything 50/50. 

As far as I am aware, there are no tax differences between a single-member LLC and having the property in your personal name. Both would fall under Schedule E of your personal tax return.

There are several factors that would have an impact on interest rates for an LLC. These would include your personal financial strength (as a guarantor), the relationship you have with the bank, your experience investing in real estate, and the collateral being taken. For a new borrower with modest personal liquidity, rates are generally around 5% with amortization periods of 20-25 years. Some banks do provide 30 year amortizations to LLCs, but those are rare exceptions.

Purchasing investment properties in your personal name will result in significantly better financing terms from your lender. From my personal experience, I have been able to acquire multi-families with very low interest rates with 30-yr amortization periods. Most banks will not provide 30 year loans for LLCs. If you decide to acquire in your personal name, get a good business owners policy and maybe even an umbrella for protection.

My buddy and I looked at a property about two months ago. He was unable to obtain financing, so the P&S agreement was written in my personal name only. I planned on adding him to the deed shortly after closing, so as not to complicate the process. The plan was for him to pay 50% of all costs needed at closing. After closing on the property yesterday, I was told that in order to add him on the deed, there would be a significant transfer tax, as we are not related. I was unaware of this, as I had previously added my wife to some of my properties in the past at no cost. Looking for advice on how to go about adding him on the deed while hopefully avoiding a transfer tax. Are we better off leaving the deed in my name only and splitting profits 50/50%. Any help would be greatly appreciated.

Hi,

I acquired a 5-family property in NH in 2016. As you all know, one of the primary benefits of real estate investing is the tax advantages from depreciation. The purchase price of the 5-family was $265,000; however, the appraisal and P&S agreement did not include separate values for the building and land. In looking at the tax assessment, the value given for the land was almost 60% of the total property value, with the building at 40%. As such, my cost basis drops to roughly $106,000. The building is in great shape, so I feel like my cost basis is extremely low. Do I have any other options?

Hi,

Tax question. I currently own 19 units in 7 different properties. All of the properties are held in my name personally, not in an LLC or partnership. I am a heavily leveraged individual, which is way I haven't yet put the properties in LLCs. My question is, are the books and memberships bought from sites like BiggerPockets considered tax deductible if I'm using to help educate myself? Where I don't have a company name, would this have any negative tax implications or tax advantages I'm missing? I have a FT job, so I'm not technically considered a real estate professional. Thank you in advance.