All Forum Posts by: Mike S.

Even if they can cancel the contract, they will probably have to pay the realtor commission. So they will have to put some money out of pocket for that. That may be your bargaining power there even if it seems that the contract says that you will not have any damage awarded to you.

There is no tax benefit. If you are not selling your property, you have no capital gain. If you sell your property, you can exclude some of the capital gain with the section 121 exclusion.

There is no reason to use the exclusion if you don't sell.

When you transfer your property to an LLC you don't have capital gain either.

The only situation when it may make sense to capture the 121 exclusion in advance is when you convert your home to a rental, and you know that you will sell it in more than 3 years and you have substantial capital gain in it. If you want to keep it for a long time, you would better transfer it to your LLC as the passive income tax advantage and depreciation will probably be better than the 121 exclusion. Now if you expect to sell it in 3+ years, you will need to make the calculation if what you are losing by using an S corp is less than the exclusion that you can get with the section 121.

There are a few options that could be explored:

Transfer the retirement account to a retirement company that will write him a letter stating how much yearly income he can expect to draw from his account. Some lender will accept that.

For that kind of money, transfer the account to a wealth management private banking side of a large national bank. The private banker will be able to get loan from the same bank.

@Ray King

There are a few companies often recommended in this forum.

One of them is Anderson Advisors. They are not the cheapest ones but have a great comprehensive list of services for real estate investors.

@Becky Haag

Usually for STR you would use a Corp as it is an active business.

However to gain the passive income tax advantages, your properties will be owned by disregarded LLCs that will in turn sign a master yearly lease with your Corp that will operate them.

https://m.youtube.com/watch?v=r5-_-_9CFIk

I agree with you, I never really liked the IB marketing and examples provided. It has never resonated with me as the concept of borrowing for consumer products has always been a big red flag for me. Also some of the websites and books are showing examples with only partial comparison, omitting other more favorable options not using IB. However, if you look past the narrow focus of IB, and expand to using the same concept of leverage for investment purpose, it has gained my full attention. And using a maximum overfunded life insurance as a collateral for a loan that is used for investment is a great wealth multiplier. There are a lot of other life insurance agents who are not bound by the restriction of the IB brand and are free to shop around for better products adapted to the investor world. @Thomas Rutkowski has a great web site with many more meaningful uses of these kind of policies for investors. 

 
That is not correct. While Nevada needed to transfer control of the LLC to a nominee each year for the renewal, in WY, you just need an agent to sign the renewal paperwork. You don't have to declare who is in control of the LLC each year. So most registered agent will sign that document for you to file the yearly filing. You can also ask anyone you know to be your authorized agent for the filing if you want.

Anonymity will not protect you if you are named in a lawsuit, but it will protect you against frivolous lawsuit being started. If a simple internet search of your asset shows that you have plenty of money, you are making yourself a bigger target.

Also, as you mentioned, WY has excellent charging order protection, so having your holding in WY that owns other LLC in other states, will give you the charging order protection to all the other LLC in the other weaker states.

@Christian Weber

Refinance first while you still live in it so you can get a personal mortgage or HELOC.

Transfer the property into a land trust where you still are the beneficiary to avoid the due on sale clause.

Then you can transfer the beneficial ownership to an LLC. You should not get any tax stamp as there is no change of control if you still own the LLC.

The section 121 exclusion will only work if you sell the property to a different taxpayer. If you transfer the property to a disregarded LLC or even a partnership where you are still a member that will not work as it is not a sale but a capital contribution. There will be no capital gain due so no exclusion.

If you really want to capture the section 121 exclusion while keeping control of the property you can sell it to an S Corp, but then you won’t get all the real estate tax benefit of passive income.

@Martin M.

I concur with this.

I am also a big fan of Clint Coons YouTube channel that has a treasure chest of gold nuggets in asset protection for real estate investor. Everyone interested in the subject should spend a few hours watching this content. Start with the oldest longest videos from seminars that will give a good foundation, then go to the shortest single topic focused, more recent ones to dig into each subject.

@Allen Li

I would have at least one bank account per LLC.

On top of that you can also have a C Corp as property management and pay all contractors, expenses and collect all rents through that corporation. From that Corp bank account you can then distribute profit through each property LLC. This money can in turn be distributed to the holding LLC then eventually from there be distributed back to you.