All Forum Posts by: Michael D.

No way should you be buying RE at this point. You don't have the financial position at this point to make it work out well for you, and way too many other good options for investment if that's what you'd rather do than pay off a loan. You have NO IDEA what your RE ROI will be - and I guarantee it will be a lot worse for you than you think - maybe negative.

If you have a 401k-type option, put the max into that and a Roth as well. Any other money left over should go toward your student loan. That'll keep you busy for at least a few years. Then you can buy a house to live in.

Do not pay down your fiance's loans or otherwise co-mingle any finances. Do not buy a house together. Then do the opposite once you're married and combine it all.

Please be clear in your mind about what you are doing: Signing a promise to purchase a house that you have no intention of actually purchasing. Do you plan to be up-front with the sellers about that? If they knew your intention, would they still agree to the contract?

"or assigns" wording may make it legal, but for a seller who doesn't understand, does that make it right?

Also, consider that without at least some cash to put a reasonable deposit up, you're basically asking a seller to lock up their property with you for little money at a FIXED PRICE, while you go find a buyer. This sounds like what a listing agent does, but the fixed price is an important difference. A listing agent makes more money (a percentage) when the seller makes more money. A wholesaler makes more money at the sellers expense. It will be difficult for you to find sellers willing to do this, and when you find one it may simply be that they don't understand.

Think Twice before taking this up as a line of work.

Because then your broker won't get paid on the your mortgage that he just sold to the actual lender, and that would make him sad.

I'll bet if you ask someone who will make money by selling - like a real estate broker - they will say you can sell it as soon as last week.

It's not clear from your post exactly what part of REI you want to be involved in. You mention not being able to afford a house, wanting to help other people be able to afford a house. And you also don't say you have a big pile of cash or fat income that you're looking to deploy. So reading between the lines, you don't want to be an investor (that's fine, lots of ways to make money without investing your own) - you basically want a job somewhere in the business to make a little side money, or maybe over time transition that into a primary career. Except that you also want to be a doctor.

One thing you might try is offering to help out a successful broker in the area on a volunteer basis, with the expectation that he's helping you learn about various facets of the industry like sales, lending, etc. This might give you more of an idea what you actually want to do.

Best of luck to you. I know it can seem tough in the bay area, but with your attitude I'm sure you'll find the way.

Your need isn't relevant to the people that would have business for you. Reword your post around the value and services that you provide and you will likely get a better response. "Knowledgeable and experienced handyman immediately available in St Louis. Good work done quickly on your schedule..." or something like that.

I am sorry to hear about your need though, and I appreciate that you're looking to do work to fill the gap. Best of luck.

I've gotten myself into trouble and would love to get some advice.

The setup:

5 years ago in 2011 I created an LLC in Pennsylvania to purchase my first rental property in Pittsburgh. Since then I've added on 3 more properties, bringing the total to 4. The second of these is a 9-unit, the others are all single family.

This LLC is a SINGLE-MEMBER LLC, with me personally as the only member.

As this is a pass-through for federal purposes and because I never had any net income in the LLC anyway, I never filed any state LLC returns.

Now I just sold the 9-unit, and the title company is holding back $21k in escrow because of a tax lien letter. They said they could send the state $14k, or they could hold back 1.5x that much in escrow. I took that option as they said it's easier to get the money back from them than from the state.

I called the number on the form and spoke to a nice guy at the revenue department who told me to just file the CRT-101 form (I think he told me that), and they'd issue a new clean tax cert so that the title company could release my money.

Well I just went to download the form and they're very complex and non-intuitive. There is also an instruction booklet which indicates that even for a single member LLC there are a bunch more forms that I need to file along with it, like L, M1, M2, X, etc.

And I have to do this for the last 5 years.

So basically I'm looking for any advice someone can give me. I'm also willing to pay a reasonable amount of money for a professional to help me out with this, if anybody knows someone. I don't want to call around because I don't want to get raked over the coals and I also want to learn how it's done.

And where can I get this "Revenue Number" that's supposed to be like a 10-digit EIN or something?

Thanks for any help!

Does somebody want to send me a referral for Buildium?

@Thomas S., I get where you're coming from but I think you may be overstating it. Clearly we all know/agree that the money isn't really yours until used by the tenant for that month's rent. If they leave early, you'd have to refund an unused portion - but there are some clear advantages:

- There's no holdover/collections risk

- They're still obligated to the entire term of the lease, which means that if they want to leave early their clock doesn't stop until the new tenant moves in (or the 12 months is up). This protects you from turnover loss.

I'm not saying it's always good, I'm just saying it's not always bad, and I can imagine myself accepting a small (5%, say) discount for an up-front payment.

@David Dachtera - Holy corporation Batman! That sure seems like a lot of round-about and bookkeeping and just general complexity for what for most folks would be a simple transaction. I'm not there yet myself. Maybe this is easy/straighforward, but if so then I have a lot to learn about it (that's true regardless).

@Andrew Pandolfino - One important point - umbrella policies DON'T "cover" your assets, in the sense that I think you mean. They just provide a larger buffer between them and liability. With a large enough liability, your assets are always in jeopardy with insurance only. This is in fact one reason to opt for an LLC, because there you do in fact have a pretty tight barrier between the liabilities of the LLC and your own personal assets - as long as you follow all the rules.

As an example, suppose you have an umbrella of $5M, but lose a judgement for $6M. Your insurance company pays $5M, but you still get stuck owing $1M personally. If the LLC lost a $6M judgement, only assets in the LLC could be collected against, and would probably just force the LLC into bankruptcy. Note that there are also rules that say you need to keep the LLC properly capitalized. You can't just strip out all the cash/equity and leave it naked with nothing to collect. This is a fuzzy point though.

BUT (careful, I don't know what I'm talking about here), couldn't the 1031 money be used for new capital improvements on the other property, rather than getting the mortgage in the first place?

I'm actually curious to know the answer on this from someone else.