All Forum Posts by: Nicholas Zeiler

Hello!

I have some basic LLC strategy questions. I appreciate any input or resources you can direct me to. Thank you!

A quick background on my situation to preface my questions: I own two duplxes with mortgages on each one in my personal name. I intend to buy more duplexes with traditional loans, however I have had interest from various people about investing their money in my (evolving) real estate business. This leads to my two questions about LLC strategy.

#1

I want to create a company that I would be able to present to potential investors. If I do create that company in the form of an LLC should that entity actually hold the properties that I (and my investors) will purchase? Or should it just be the face of the business while individual properties are held in separate LLCs?

#2 

I cannot have my current properties held by an LLC since they are financed by traditional mortgages in my name. From what I have heard I would need to refinance, put 25% down, and personally guarantee the loan anyway to get it in an LLC. That being said, should I create an LLC for property management and use it to advertise, collect rents, etc?

What has worked for you and what would you recommend? Thank you!

Hello,

I would you all to look over these closing costs (all personal and bank info is redacted).

The purchase price is 400,000 and I am putting 16k down. Closing costs are coming to 30k. That seems high to me but maybe its normal.

In the docs it shows a seller credit of 10,000. The seller will not be giving me a credit of 10,000 so I have to come up with the 30k myself.

Let me know what you guys think of the amount of the closing costs for $400,000 property.

Thanks!

Just solo right now. Its my only property. Can you give me some more insight into how those repairs could be shown as an asset?

Thanks!

Good point on not paying taxes on money not earned.

Yes they do. However I certainly can afford the payments even without including the potential income from a new property. Do you have any other advice?

I have a duplex that I live in one side with roommates and rent out the other. I want to buy another property in 2019 and am looking in a more expensive area of town.

To be approved for a higher mortgage amount by a bank I need to show as much profit as possible on my tax returns. Writing off the repairs I made this year ($15k for new roof, gutters, bathroom remodel, etc) will wipe out almost all the "profit" from my duplex and affect my loan approval amount.

Should I bite the bullet and not claim any losses and pay full taxes? Or write off everything I can?

Another option I have is to write off everything I can, but then pay off my car loan with the money I would have paid in taxes. This will reduce my monthly loan payments by $200 which will help a little in mortgage approval limit. Kind of a middle ground. Still benefiting me more than paying taxes but takes a chunk of $$ out of the bank.

Let me know what you think all input is appreciated.

 Thank you! Great advice.

 @Thomas S.

I like your approach. I am currently researching the details of requiring/enforcing it. But I also would rather "sell" my tenant on the benefits rather than make it seem like im forcing another expense upon them or something. Would you mind providing me with the terminology you use in your lease concerning the rental insurance? Knowing how to incorporate that would be very useful. Thank you!

Hello folks.

I own only one duplex for now but plans to grow soon. 

I want to include language in my lease requiring my tenants to posses an active renters insurance policy as well as indemnify and hold harmless the landlord. My question is if I should actually enforce the requirement to have the renters policy. I ask this because:

1. It could become a headache always having to keep tabs on it.

2. If they let it lapse they are violating their contract and would not be able to pursue me for their damaged possessions. 

Which is the goal.

So basically can by requiring it but not enforcing it do I still achieve a level of protection against a claim holding me responsible for damaged/stolen personal property of the tenant? 

 Thank you Andy. I do not work with such a broker, but that is something for me to keep in mind in the near future, I can see how that would be advantageous. My expenses this year were much lower, so its less of a factor, but I am asking to learn what most people are doing.

Hey folks. This is my second year in an owner occupied double. Great experience so far. I have a question I hope the BP community can give me some insight on. Should I claim all of my expenses on my taxes? 

I ask this because In 2015 I claimed every expense possible and it saved me alot of $$$ on taxes, but in the end it had a negative side effect when applying for another mortgage on an additional property.

 The lender I was working with said that they couldn't count my rental income when determining the mortgage amount I would be eligible for. Basically, my expense deductions for the property were very close in amount to the income, so the property didn't generate much of a profit. As a result it did not increase my annual income and there did not increase the amount I could "afford" to borrow.

Now I am doing taxes again and wonder if I should claim any deductions. By not claiming deductions I could increase my annual income (from a tax perspective obviously) and that would be beneficial as I intend to buy more properties this year.

Any insight is appreciated. Thank you!

*My expenses are much lower currently than my first year of ownership as I had to invest some money on updates when I purchased it.