All Forum Posts by: Chan K.

@Hattie Dizmond 

Excellent, Hattie

I am reading up on the links. Any good tax consultant you can recommend.

How do they usually charge? Per question, hour, .... etc. It sounds like you have had experience with them in the past.

@Hattie Dizmond , @Shaun Reilly , @Jerry W. 

If you don't mind, would you be able to run me through the process from withdrawing the money from the LLC to filing for tax. I am a buy/hold investor and I have a full time job. Below is a scenario or process to withdraw the money from the LLC and file for tax.

1) Establish an LLC business account with a bank. Deposit all rental incomes under this LLC to this account. Pay mortgage, ins, tax, maintenance expenses, ... etc from this account

2) Write a business check from LLC account payable to me. These checks are total to YY

3) When filing tax at the end of the year, for the LLC, tax = total_rental - expenses - debt service - YY

4) When filing tax at the end of the year, for my W-2 and personal, tax = W2 + YY

Let me know if I missed something or if you would like to optimize this process and minimize tax payment.

@Bill Gulley 

Thanks Bill and Les.

I will look into the K-2 form.

Les, once I withdraw the money, do I need to add the income to my W-2 from work when I file tax at the end of the year? You are right the LLC only has one member.

For example,

My full time job generates XX annually. If I withdrew YY from my LLC for the year, then I have to file my personal tax based on XX+YY per that year.

For the LLC, I will file the tax bases on = annual income from rent - expenses - tax - mortgage - YY.

FYI:

I do hire maintenance guy to fix major items like hot water boiler, gas heat, .... etc, but I underwent minor repair on own.

@Hattie Dizmond , @Shaun Reilly , @Jerry W. 

I think LLC will work for us, because we will buy and hold the property for a long time. Thank you all for your feedback. I was leaning toward the LLC in the beginning, and just want to get an assurance from an experience investor.

Hi BPers,

I bought a property under an LLC that I formed. I setup a business account where I deposit all the income in there. I also use the account to pay for debt service, tax, insurance. misc expeneses ....

I list myself as a manager of the company.

The question I have is that, how do I withdraw or get pay? Ideally, I can just write the business check and make payable to me. Do I need to file any form before withdrawing or the end of the year?

What is the process for those who had gone through this?

Thanks,

Hi BPers,

I am in the process of buying a property with a friend. I would like to get a recommendation of which entity to form. We are a 50/50 partnership for both cash flow, equity gain, decision, .... etc.

I am debating between an LLC or Limited Partnership. Which one is the best for us?

Is there any other recommendation on another entity?

Thanks,

@Rodney Marcantel There are two type of equity line of credit: secured and unsecured.

Secured meant that you have to put your house on collateral - low rate.

Unsecured meant that you don't have to put anything on collateral - high rate. Similar to applying for credit card, but need to send in paystub, income tax, ...etc.

Since you have something to collateral, I would recommend secured equity line of credit against your single primary house as you can get the most out of it, FYI: high LTV. In this case, if your single home appraises for $425k, then some banks will allow up to 90% LTV which is $425k*0.9 = $382.5k. This is a lot of money, and I recommend that you only use one house to pull out equity as you want to play save.

I also recommend that try leveraging by using hard money lender, instead of using your $382.5k. Only keep the $382.5k for backup to pay for holding cost .....

Vote like if this response help you!

Thank you everyone for your feedback, and approach recommendation. I believe Tom V recognize what is going on really well.

Usually, I am really nice when I picked up a phone call from tenants concern. I use phrase like "thank you for calling", "I will address your issue and concern immediately as I know your concern is very important", "I am sorry for the inconvenience", "I am really sorry, I could not make it as I am with my family right now and let me stop by at 8:00 AM tomorrow" ..... etc.

Other 6 tenants that have the same negative impact understand the situation and trust that I will take care of this promptly, but why this only tenant. I told her straight up in person that I am feeling like you are bossing me around and that you are micro-management my ability to response to the hot water boiler matter. She told me that nothing is personal and it is just business. Remember, I just bought this building 1 week prior. I understand that I am responsible for addressing tenants concern, but I don't intent to have a boss whom is my tenant. One boss in my rat race is enough, and that is why I am trying the real estate job part time to build enough passive income to get out of the rat's track. If it causes more headache and dread to manage one tenant that required tremendous attention and response every minute, then maybe this tenant should be removed as she/he might not fit in the community or business model.

Story: The next day, I scrambled and called 6 plumbers and finally got someone to come down the same day at 1 PM to fix the issue. They overcharge me substantially, but it is worth the cost. The following day, she called me again, and she told me that she has a breathing issue, and would like to move my commercial trash can a bit further from her first floor unit.

Today, I am going to text her and let her know that "mam, I am showing your unit to build up tenant wait list just in case you have to leave in the near future. I believe as a tenant at will, I don't need to give her any reason to give my 30 days notice.  

FYI: I never called the other plumber who told me "nothing was wrong with my boiler and water flood the basement from the boiler of interest".

@Mike M. 

I think I can get someone in a couple of 1-3 days. The lady was expecting everything to get done when she is ready to take a shower at 5 PM today when the boiler broke at 9 PM in the morning.

I even told her that when stuff broke in my, I still have to wait.

I think I might be too nice to tenants. I should ignore certain people who don't have much common sense.

@Account Closed Like @Tyrus Shivers said that certain thing is not in landlord's control. You can call to get someone down to fix it ASAP, but the maintenance's company also has protocol. Usually, as landlord, we don't give excuse. It is very black and white. This is a business and a Job.