All Forum Posts by: Matt McMacken

@Brian Boyd Up until that last year I only had 2 properties. I've scaled up through BRRRRing to 6 now, but I can cash out refinance a BRRRR from my local portfolio lender in my name much easier than if I had it in an LLC and went commercial. I'm also not limited to 10 properties (so I've been told lol).

After refinancing I put the property into my LLC though. Now I'm getting the feel for things and getting my feet wet with different approaches to financing.

As some of you already know theres many wonderful advantages of owning real estate come tax time. For example, I’m able to show a rather small profit on each rentals due to depreciation and other expenses even though the revenue is 5-8x that.

As a schedule E filer, my experience has been that banks are checking my net income per property plus W2 income against my debt as a whole while overlooking revenue altogether.

I'm now moving my properties to an LLC where I'll have a K1 and actual financial statements. My assumption is now revenue will come into play and I will have easier access to capital and banks will focus on revenue instead of tax returns.

I'm hoping folks could shed some light on any benchmarks they've noticed along their journey through real estate where banks consider your LLC as self sufficient and no longer tie you to W2 income.

@Dewey Cheatsem I'm not a CPA, but I am an accounting professional. I personally think a series LLC is excessive but it's all about how risk tolerant you are.

Also having a llc for a property management company might just complicate things unless you have a decent size portfolio and are charging overhead and profit on repairs.

As far as taking distributions, whether you take a distribution from one LLC or the other shouldn't matter, but I'm an accountant so it's easy for me to track.

That said, from my understanding having a series llc like that really puts an emphasis on separate financial statements which it may be easier to structure distributions from one entity if you don’t have an accounting background.

Either way, taxes don’t sound fun lol.

@Kevin S. I think he’s calling a spade a spade. Economic indicators (good or bad) are what ultimately drive all aspects of real estate.

Even if the coronavirus cant stand the heat, the presidential election will shake things up.

@Matthew Cervoni request to move to the audit department 😂

@Jeremy Rhodes At 250k combined w2 income, the $500 for a CPA to do your taxes would be a drop in the bucket.

@Jon Huynh I’d imagine there would be a portfolio lender somewhere close. I’d call every bank and their mamas to find the right one. Just have to make those relationships!

@Michael Lowe I’ve heard so many people talk negative about real estate with little to no experience in it. Really there is so many horror stories that most people stray away from real estate and while they have no experience, mean well. The guy who just put his kids through college with real estate is no where near as exciting as the tenant that left over 15k in damages lol.

I’ve learned to hold peoples opinions with a grain a salt. You wouldn’t ask advice from your doctor about investments, and you would you talk to a broker about medical treatment. When you do, it starts to get dangerous lol.

@Shiloh Lundahl If you have access to equity or a solid understanding of finance, you can make things happen without a traditional savings.

@Gary Siver take me with you! Florida sounds nice right about now with it being negative 8 out. Watertown itself is not bad for taxes, but as soon as you get outside of the city, taxes are ridiculous. Much more suited for a flipper than a buy and hold like myself.