All Forum Posts by: Michell Chase

Morbid question here...but at a certain age we thing "What happens to my assets when I die?". ... as I own my RE portfolio via my single member LLC is there a process that I can setup wherein the event of my death that LLC passes to my designated individual along with the assets owned by my LLC? Yep I am an overthinker but also don't want to put my tenants in limbo in the event that something should happen.

THanks

I am currently working on building my RE portfolio. As a beginner, before learning about all different types of lenders, I purchased my first investment property under a conventional investment mortgage in my own name. Since then I have opened my LLC and am beginning to buy other investment properties under that LLC. As I am not a spring chicken with my age..there are always concerns about "What happens if I die?"...therefore the underlying base of my question. Would it make sense to refinance my conventional into a DSCR with my LLC that way I can create a plan for my single member LLC upon my death so that my RE assets are also passed along...

Thanks

I registered my LLC in Wyoming and was not told anything to that nature..but my investment property is in NY so I also have to register my WY LLC as a foreign entity LLC in NY as I will be generating income in that state...

Quote from @Diyan Yap:

1st, I don't like quick claim deeds.
Always use the title company, a little expensive but worth it and less guessing with liens.
Where in upstate NY exactly, do you have contractors who are willing to go there? 

Yes I have a contractor looking at it tomorrow. It’s a quitclaim deed because they bought it from city tax sale.  I would do title search and it would be a purchase contingency. They will make some good money on selling it at a low price as they purchased for almost nothing and are just looking to dump it for some cash.   

Quote from @Diyan Yap:

1st, I don't like quick claim deeds.
Always use the title company, a little expensive but worth it and less guessing with liens.
Where in upstate NY exactly, do you have contractors who are willing to go there? 

Yes I have a contractor looking at it tomorrow.  Quitclaim is only option on this as they bought it from town tax sale.   I will definitely do a title search.  I am looking at it from the perspective of what could be done with the additional land as well. 

We have a unique property we are looking at in upstate NY.  It is listed for low 40’s has been on the market over a year, went to auction and didn’t even sell I think we could get it for less.  The duplex itself is a disaster it is a 3/1 and 3/1.5 vandals got in when it was vacant and cut pipes and electrical basically would need to be gutted and probably over 100k in renovations.  The unique part is that the duplex is in the city and is on a huge corner lot that is 1/3 of an acre so could potentially hold another structure and the sale also comes with the neighboring lot that is smaller but is also large enough to build a structure.  I see a lot of potential with the vacant land as well as rehab on the structure.   Just curious of thoughts on that.  Also the seller got the title from the city on a tax sale and can only offer a quitclaim deed so is offering seller financing.  We already have hard money lined up to cover the mortgage and rehab.  Not sure about that process would I have to accept his financing being it’s a quitclaim deed? 

Thanks 

@Henry Lazerow. I know this post is old, but could you shoot me your insurance agent if they cover NY?

@Erik Estrada @Joshua Thompson. Lines of credit = pulling cash from a couple of credit cards with high limits that I have available (typical 22-23%).  I cannot take a loan from my 401k as I am already retired so I can only take distributions.  I cannot transfer to a self directed 401k as I am a special class that does not pay a penalty on my withdrawal even though I am only 51.  Moving to a self directed 401k I would lose the ability to withdraw for 8 years.  Between my retirement and 401k distributions this year it bumps me into the 32% tax bracket from 25%, therefore another withdrawal this year would bump me to 34%.  Next year with my pension only I am in the 22% tax bracket but also will have more passive deductions with 2 properties, REP status and cost segregation on both.  I intend to qualify as a REP as I have no W2 income and handling the purchasing and managing of my investment is technically my job now (i do have a handyman as I do not live in the state where my property is, I do all things related to the property other than on site repairs).  As I just bought my first property last month and this will be the second I plan to do cost segregation on both but I won't have enough passive income from RE this year for those deductions to matter I don't believe.  I don't anticipate needing any capital repairs in the 3 months between purchase and January as the units are in good condition and rentable now.

It is also a possibility to do a HML rehab loan as the house does need about 15 windows (houses in this area are all old victorians built in 1800's), this would only require 10% down.

I've already purchased 1 rental property (a duplex) this year with a conventional mortgage. I withdrew from my 401k for that as I am retired. I would like to buy my second duplex using DSCR loan which will require about $63k total to close. Taking another 401k withdrawal this year will put me in a higher tax bracket for 2024. I would like to withdraw from various lines of credit to buy this property and then in January make that 401k withdrawal and payoff the credit used for the purchase. So it would be about 4 months of being at about 80% of my credit limit across the board. In the end is it worth it? I have plenty of funds in my 401k I just can't dip in any more this year to avoid that tax jump. It's a great deal and overall renting 1 side pays the mortgage…and yes I'm am going to be hiring TrueBooks as my tax advisor soon! Just curious the thoughts here in using this credit short term. Thanks in advance.

So in order to get private funding for my next investment property I needed to register an LLC as they don't lend directly to individuals. I registered in Wyoming as many do but just ran across information saying that in order to "conduct business" in NY in having LLC owned rental property, I must now register as a foreign LLC with NY. Anyone have experience with that? Having to register your LLC with multiple states?