All Forum Posts by: Monica Crisostomo

Thank you all, this is all very helpful information. Like some of you suggested, we will probably talk to a lawyer to find out if we are trying to setup a over complicated structure that may not be needed or that may be setup incorrectly and create more issues.

Hello,

I would like to have some feedback about the structure we are putting our rental properties into.  We are thinking:

a) 1 Trust for each rental

b) Trust's Trustee: Disregarded LLC

c) Trust's Beneficiary: Regular LLC that manages the Disregarded LLC (Trustee)

d) We (my husband and I) manage the Regular LLC (Beneficiary)

e) Each new rental will have its own Trust, but all the Trusts will have the same Disregarded LLC as the Trustee, and the same Regular LLC as the Beneficiary.

f) To add more protection, we are thinking about making a loan to the regular LLC (Beneficiary) to purchase the properties so in case there is a lawsuit the LLC does not fully own the properties. Also, the LLC does not owe enough money to make purchases of properties (we are thinking the IRS may question how the LLC is purchase properties if it does not have money of its own).

Thanks much,

Monica

Hi Bob, 

To tell you the truth I do not know if the property is registered as a rental property. What is the implications of that?  Through the CMHA landlord portal we can see our property listed under our units, so I'm assuming it is.  We did not get the credit report or a written background check of the tenant that was already in place and in foresight that is something we should have requested since they are now up to date, but they were late for a couple of months which made us very concerned.

Thanks.

Thanks so much for everyone for the comments and responses! I will definitely be following up with you all. We traveled to Cleveland for a few days earlier in the year and visited the east and the west side and have learned a lot about neighborhoods, going through the POS process, property taxes, etc. (still much to learn!). A couple of very high level questions that just occurred me after some of the comments and messages to help me rule out or look more into them (we were thinking of having at one point 20 SFR, but I am checking here in case there is a faster way to create passive income since we have some cash available and good credit to qualify for loans):

1.  Does it make sense to jump into multifamily properties?  Thinking of 4 doors, but also 50, 100 doors maybe. 

2. Construction - I see lots in some gentrified sections like Tremont that under $100K and I have not done research on construction costs yet but I see newer properties selling for $500K-$600K there (I have check comparables to see properties sold so I'm not sure how feasible it is to sell at those higher prices or if they may be inflated).  

Thanks.

My husband and I live in California and we completed our first purchase of a SFR in Cleveland (Garfield Heights) about 4 months ago through a turnkey company (purchase price about $61K with a monthly rent of $920 before expenses). We are now ready to look for more properties, but after searching through Zillow we are considering doing this without a turnkey company, but we understand we need we build a support network of contractors, property managers, real estate agents, partners and more. Do you have any advice on how to find a network of good people? We are both in the computer field (software engineers), are very solid and just good people, and are looking to use the income from rents to at one point cover our living expenses so we can quit the 9 to 5 and just spend time with our family. I also just got laid off so I unexpectedly have a good chunk of time to research, learn and work towards this. Any advice and/or introductions are greatly appreciated.

Thanks!

Monica

If the returns are low compared with out-of-state properties, what are the advantages of buying in the Los Angeles area (besides saving on traveling costs and keeping a closer eye on the property)?     Also, if buying in LA, what would be some areas that you would recommend looking at?   I'm trying to figure out if it is worth it to get a larger loan to buy a property in a very good area as our first income property or if to buy in an ok area?