All Forum Posts by: Nick Vollrath

Congratulations Lee!

Thanks for the clarification!

Can anyone explain what deductions are allowable as a limited partner in a real estate deal vs. actively owning/managing a property? For example, if someone creates an LLC through which they invest in limited partnerships, are they able to deduct expenses related to the management of their LLC, e.g., mileage to REIA meetings, business meetings or travel, etc?

@Lee Underhill I took a look into some of the deals in Edison. I would be careful to vet the properties to ensure you can actually rent them. On paper the initial numbers look great but some of the properties I looked at do not allow for investors or have requirements that the owner must live in the property for a year and then only allow the unit to be rented for a maximum of three years without requesting a hardship exemption from the community association. What you also need to be careful of is the HOA fees. For some of the properties all of the utilities are built into the fees which you'd need to build into the monthly rent and could be a substantial amount. For at least one property, the community charges a larger monthly fee for those who rent out their units. This significantly increases the real cost of the property and you'd need to include these costs into your financial model.

I'm new to real estate investing and looking for some advice on when it makes the most sense to set up a business entity. While I know I need to talk with a real estate attorney & CPA, does it make sense to set up an entity before I purchase a property? My intent is to set up an entity which will own the individual LLCs in which I'll purchase the properties. Before generating income through the rentals, I'd like the ability to deduct the expenses I'll incur in finding a property -- direct mail, mileage expense networking or visiting properties, etc. Thanks in advance to the BP community!

Hi Cyntnia, I'm just getting into real estate and have the same question. It would be helpful to know how much to estimate with and without bank financing.