All Forum Posts by: Mark Gruetzmacher

@Dave Toelkes You say you get a percentage.  What kind of percentage do you have ours set at? So do you have it in your agreement that whoever does that takes X amount of %?  Can it also change to some other member and they then would get the % accounted for?  I suppose you can write it however you would like it.

@Adam Drummond Yeah seems like deal come and go real fast if they are good.  Not much for the oil boom here in South Dakota.  North Dakota is going like crazy though.  Everything up there is going crazy though.  Crime is huge and rent prices are some of the highest in the county.  Not sure I would want to but up in that county.  McD's pay like $15 and hour and I have even seen jobs driving basic water trucks for something in the 25-35/hr rate.  But people go where the money is and in turn brings everything else along with it.

@Jerry W. I have thought about doing the LLC thing. Not much more to setup than the partnership anyway. I think if we did the LLC we could then do all 3 of us on it. I have been looking into the difference between the member managed vs manager managed LLC's. Manager managed almost sounds like the better way for our situation where my father provided the capital, my sister will mostly be more silent and just collect the share of profits and my self will do the decisions and pay the bills etc.

I am trying to understand how it all works. I planned 10% for PM, but if that is part of what I would do, would the operating agreement have my share 10% higher or have in there some sort of agreement the profit share is 50/50 but if one person takes on the PM part then the share would be 55/45? I guess I was looking at it as I will be the one to taking care of that side of things and didn't want to have to actually pay my self from the LLC to do it. Again not sure exactly how things like that should work. I need to talk with an accountant or attorney and get more info as well.

@Curtis Bidwell Are you saying that for example if I myself did the (manage showings, collect rents, mow lawns, fix toilets, etc), then I should pay myself? I assume you are talking of course not by a % share but by an actual wage. If I did that then wouldn't I need to be either 1) and employee of the LLC thus creating payroll, tax withholding, work cmp, etc. or 2)do it as a contractor thus paying self employment taxes? Again I am not to familiar with all of it so I ask.

Of course writing an agreement up sounds like a huge task when you have a blank sheet of paper in front of you :)

@Adam Drummond That place looks pretty decent.  If I had stuff like that out here by me for those prices I would be buying all day long.  Seriously out here singles cost that much.  They just sold a 97 16x80 in a park for $31K about a month ago.  Decent places out here rent for 700-800 for singles, doubles are more the 800-1100 I think.  If on land maybe bring a bit more.  I am kind of in the same thinking as you.  Buy something decent and rent out for awhile.  Have it paid for in short time and then the rest is clear to fund something else.  Tenants will always be tenants, some are great while other are horrid.  I think no matter what type of rental you have you will get that.  Maybe a little more so with mobile homes because it maybe attracts the lower class tenants.  But that doesn't mean you can't have some great tenants in mobile homes as well.  I think it all leads back to screening in some ways as well.  Let us know what it looked like if you go see it.  Take Care.

@Collin Goodwin I actually closed on it today so it is mine now.  I have my hands full at the moment and will be busy for the next month or so at least with other things.  I am not sure how things are going to go quite yet.  I need to gut the basement anyway on it but once done I will then be able to see what supports are where.  Maybe have you come take a look then.  We should meet for lunch sometime as well as I am by Ellsworth as well.  Keep in touch.

Was looking online, does the EIN have to go under some sort of business name?

@Steven Hamilton II 

Now is the EIN just under my name when you apply for an EIN or both names?  Then at the end of the year do you file an information return under that EIN?  What about the expenses and income.  Do they have to be split and then recorded on some form?  Can I take care of all the expenses and income and then disperse her share? Sorry I am not familiar on how it works. I guess i am wondering how all the deductions work and who records them and where.  I will have all the receipts.

The plan is to have my sister on the deed as well but being that she was not local I thought it would be easier to just get it all done and then have her added to the deed.  As for gift tax, it was a total of about $25K.  That is what he put up for money.  Half for me and half for my sister.  How should that be documented  for gift tax reasons?

@Steven Hamilton II Thanks for the quick reply.  If a partnership in best way.  Since we agreed to do this together, thus automatically forming a partership by default, is there anything further that needs to be done for tax purposes? EIN? I know I would need a GOOD agreement as well.  So since it is a partnership, how do you expenses and income?  Do you have to split receipts and split the rents or can I somehow take care of all of the income and expenses and they she gets her share of the profits.  If I am allowed to take are of all the income and expenses and then pay her for for her share, is it still passive income for her.  

As for my father-This is something that he wanted to do for myself and my sister.  How do you go about that tax purposes as well.

Sorry for the questions.  More info to fill the brain with.  Gotta love it.

Hello everyone, I have another question to run by you.  I am trying to figure out which is the best way to structure this deal and how to do it for tax purposes as well.

I am closing on property on Tuesday.  My father purchased the property cash.  The property is in my name. But the property is to be both for myself and my sister.  It will be a Buy and Hold investment.  At this point I will most likely get 55% (10% for PM) and my sister 45% of the profit since she lives on the other side of the state.  Or would consider input on the % split. I am trying to figure out which is the best way to structure the whole thing.  My sister will most likely do absolutely nothing besides collect her share of the rents and her share when it sold way down the road.  If it needs repaired then I will most likely do the repairs but I need to be compensated for that, but how?

So I am wondering which is the best way to structure the whole thing.  What forms are needed for tax purposes.  I don't really plan to partner with any others down the road either if that makes any difference.  

Appropriate all your responses

@Jerry K. Thanks for the link.  I will bookmark it and check it out.