All Forum Posts by: Mike S.

@Dusty Laurin

I have also invested in multiple deals with Ashcroft Capital but I haven’t been through a full cycle yet.

So far I am happy with their communication and all payments have been on time.

@Kealan Hobelmann

Your LLC need to be registered in the state where the property is to be able to act in that state.

Now the LLC could be originally filed in that state or be an out of state LLC that file as foreign registered in addition to it. However why would you want to pay registration in two state when you only need in one.

Also the most important part is that while all state are offering the same inside liability protection. There are wide differences regarding outside liability. So it is often recommended to open a holding LLC in a strong state like WY and to have then all the property LLCs in other state owned by the holding LLC. You get the local LLC required for operating and the asset protection of WY at the same time.

@Joseph Binkowski

Don’t forget that you can now be qualified as an accredited investor by passing the series 65 exam without any income or net worth requirements.

It will cost you around $200 to $300 and will be valid for 2 years (unless you can park your license with a financial advisor firm, then it will last as long as you maintain it).

It is not a difficult exam and you should be able to pass it with around 40 hours of self study with a good prep book or website.

Yes but if you are not using a C or S Corp (or LLC taxed as) as a buyer, it won't be a separate person from you, and you won't be able to use the section 121 exclusion up to $500k for a couple, $250k for a single, of tax free capital gain on the sale of the primary residence where you have lived more than 2 of the last 5 years.

You can have a look at this informative resource:

https://andersonadvisors.com/1...

https://andersonadvisors.com/h...

@Venkat Varad

You will need to have the entity taxed as a C or S Corp if you want to use the 121 exclusion.

It could be an LLC taxed as such or a corporation.

You would also usually make an installment sale with the entity but recognize the full value on your first year 1040.

The core behind this technique is to use a maximum overfunded permanent life insurance policy. The strategy is branded under different name like infinite banking, bank on yourself, be your own bank, the LASER fund, ...
Some are promoting the use of Whole Life Insurance, some the use of Universal Index Life Insurance. They both have their pro and con and can work well.

The cash value of the life insurance is expected to grow at a 4 to 8% IRR depending on the type of policy.
You can use your cash value as a collateral for a loan (between prime and 6% interest rate depending on the policy or the bank you use), while the cash value continue to compound its grow on its full value uninterrupted. You are making your money work at two places at the same time. If you use an independent bank for the loan you will have to pay the interest back, but you should be able to deduct them as expense if the loan was used for investment. If you use the insurance loan directly, you don't have to pay it back if you don't want too as you can compound the interest until you die. At that time, the insurance will reimburse itself from a portion of the death benefit. It is a powerful strategy to get tax free income during retirement. The rest of the death benefit is transferred tax free to your beneficiary.

Life insurances have bad reputation as the fee are front loaded and it may take a few years to absorb them. But if you look in the long run, over the life of the policy, the average fee is probably lower than in an employer 401k or many mutual funds. Also, only a few insurance agents are familiar, or willing to structure max overfunded life insurance policies as instead of getting the maximum death benefit for the minimum premium you should seek getting the minimum death benefit for the maximum premium allowed by the IRS. The agent commission is primarily related to the amount of death benefit, so they are lowering their commission selling these policies.

You should have a look at @Thomas Rutkowski website and posts where he has plenty of useful information on these kind of policy uses for real estate investor.

There are a few law firms very well aware of asset protection for real estate investors that are often mentioned in this forum. I have wasted money on a local law firm that was supposed to be specialist in asset protection, but I was very disappointed with them. I eventually used Anderson Advisors. They are not the cheapest, but they have under the same roof asset protection and tax attorneys who offer a comprehensive approach to make sure that you not only get asset protection but also tax efficiency. I really like their offer where for a low monthly fee, you have unlimited access to their team to answer your tax and legal questions.

@Gigi Smith

I would mail her the money as it is hers but would not entertain any dispute on the amount as the delay for fighting any of your withhold is long passed.

@Chinki Kumari

I would suggest that you spend some time watching the multiple videos on the Clint Coons YouTube channel.

You will find everything you need about asset protection and privacy for real estate investor.

California has some special twist in the setup to avoid the $800 franchise fee on every LLC.