All Forum Posts by: Matthew McNeil

Nope. And, just for clarity; you don't "sell" your rentals to your LLC. You transfer them using a Quitclaim.

The way you've described your post, you're implying a direct connection between qualifying for a loan and the size of the down payment. There's obviously more involved to qualify for a loan.  If, however, you want to help qualify yourself to a lender who's not quite convinced to approve your application, then "yes" you can put more money down. Then, you can do a cash-out refi later and reinvest it into another property.

Since you offered your post as "light hearted," I'd have to say it was the first time I wasn't nervous at Closing wondering if I'd made a mistake with my numbers, and feeling comfortable that I could sign documents without asking for clarity on every page the Title officer was sliding in front of me.  That was my 5th time. 

My CPA prepares my taxes using the FEIE because I legally reside out of country.  As @Eamonn McElroy wrote above, you should be able to find a CPA here on BP.
Word of advice for what its worth.  The only problem I've had filing a FEIE is that lenders are not generally familiar with it when they look over your tax returns in consideration of a new loan application.  Be prepared to try and explain it to a lender who has no idea what you're talking about. They understand you're living overseas. What trips them up is seeing the $105,900 deduction for 2019 on the tax return.   

No blending of personal funds with the LLC. Separate bank account. Insurance policy must be in name of LLC. Asset needs to be QC'd into LLC. If PM is used, the Management Agreement needs to be in name of PM. No money can be given to LLC unless it clarified as a loan. Signing checks must include the identification by signatory as "Managing Member", etc.

Byron, every BP member who lands on your post is smiling because each of us can relate.  Welcome to BP.  This is a community of people willing to help each other move forward and become successful.  You are surrounded by friends!

The premise of your question is the concern that a liability claim might exceed $1M. I asked this exact question of my attorney who specializes in RE. His response was that such a lawsuit is extremely unlikely and rare. However, it’s important to position ourselves from a worse case scenario and work backwards to make sure we’re fully protected based on our level of comfort regarding risk.

And, "yes" if a worst-case scenario did happen then an aggressive attorney would most likely go after your personal assets, which further supports your desire to put the asset into an LLC.

The books you’re referring to are for the most part not necessarily referring to the scenario you’re describing. Rather, they’re laying out a framework for asset protection and not the alleviation of a worst-case scenario lawsuit.

Each asset in my portfolio is held in a separate LLC. If you decided to go the LLC route its important that you understand all involved in making sure you don't pierce the veil, which most people inadvertently end up doing by omission. You need to do your research. Start by asking the Title company if the insurance is forfeited if you transfer the asset. Then contact your lender to make sure you don't violate the due-on-transfer clause.

What is your LTV per property? If its high and you carry $1M insurance per property then why do you need an LLC?

Thanks for the feedback James.  I've done my best to balance out OR equate personal service with better service, which is why I've given my PM the benefit of the doubt.  I don't need the personal touch as long as I'm confident they're doing their job.  In my case, my PM spent $1100 to replace a H2O tank on one of my SFHs without consulting me, and I've not seen a statement on another property since August. And, they messed up the deposit on a 3rd property. The difficulty has been that I value relationship.  However that value can't be maintained at the expense of what its costing me.  Time to pull the trigger. 

Well said Patricia.  The relationship I've enjoyed with my PM for over a decade seems to have come to the end of a season.  Its unfortunate.  I just need to pull the trigger and let them go.  Thanks!