All Forum Posts by: David Sohn

@Peter Bowring - Do you market towards Middlesex county / Worcester?  Norwood a little far for our team.  Would be interested to get on your list.  

@DONALD KUCZINSKI - I'm interested to learn more.  Can you PM me more specific details for the deal mentioned?  @David Corey FYI. 

Hey @Ryan Taylor - Sorry for the delay here.  I am not a tax expert and don't play one on TV but I'll try to answer as best I can but would strongly advise you to consult with a tax expert.  There are many on here that can likely offer better advice than me.

In my experience, I don't know if you CAN shield that money from the tax man.  Planning and budgeting well is much different than what you actually spent on the property in terms of expenses/cap improvements.  The upside here is if you planned/budgeted to spend that money and didn't that's a great year!  Hold onto that money b/c at some point you WILL need it!

I hesitate to give you more advice here b/c I'm really not qualified to do so but in general
- Your best bet here is to keep really good books and then discuss with your accountant about other ways to reduce your tax liability
- ask about non-reimbursed (partner) expenses - this might be an area where you can maximize your deduction for time spent working on your business or traveling on behalf of your business, etc.  
- meals, mileage, internet, cell phone...all things you can look into in terms of deductions.

Hope that helps a bit, have I mentioned that you should talk to a tax advisor :)

Best,

David

@Patrick Wheeler - we have chosen to go with someone local to our business.  I wouldn't say they are real estate focused firm (they are more general CPA firm but have knowledge in all areas) but there's a strong pre-existing relationship there for us so it worked out well and they've been great thus far.  I'm happy to share their info if you PM me.

Anyone have any great CPA / Tax Partner referrals?

More info...

Our business is scaling up and we need a solid referral for a CPA/Tax Partner.  Ideally looking for some light book-keeping / occasional audit of our own q.books online accounts, someone to file the businesses taxes and who is well versed in both the flip AND rental aspects of the business.  1031 exchange experience a plus as well.  So, pretty much a full on tax partner.

Prefer a Mass based firm but not required.  There's something about being able to have a face to face on this stuff that gives me and my business partner a certainlevel of comfort - but it's not necessary if we find the right partner.

If anyone has any thoughts - give a shout!

@Mike Hurney - Central Mortgage

@Chris Marshall - Listen to Brandon Hall's podcast (196 if I recall correctly?). Anyways, he outlines, near the end of the podcast, some reasons holding title to your personal residence in an LLC is a bad idea.

@Pat McCandless - Just giving you another option here, you might want to chat with Ann Bellamy. Very active on BP and in MA, NH markets and also one of the founders of Black Diamond REIA.

We have not personally worked with Ann (yet!) but heard great things.

Howdy Dakoda.

Not a dumb question.  No doubt becoming an appraiser would be helpful in determining value - but not sure you need to go through that level of intense training to really achieve reasonable and consistent ARVs.  It's like any other learned skill - just takes practice, patience and probably a bit of mentoring from a local realtor or investor.

I'd focus on 2 things to get better: 

1) there's a lot of discussion about ARV, Comps, Value on BP -- do some reading and you'll quickly get some ideas/methods you can use. J.Scott, for example, explains multiple ways to look at calculating ARV in his book on flipping houses (no affiliation) and so do many other seasoned investors.  Here's another example, written by Chad Carson that could be helpful: The Ultimate Guide to Quickly Calculating A Property ARV

2) look into finding a local realtor/investor that can spend some time on this with you and might be willing to show you the ropes a bit more hands on for your area.

Best of luck!

@Nadav Swarttz - first property we bought was in our personal names (3 of us). We *wanted* it to go under the LLC (in fact we do all operations, banking, etc through the LLC...and taxes as well) but the property is held under our names personally and still is to this day!

We worked with a lawyer who tried to pass title to the LLC and he said (as many on the forums have as well) that he's never seen the due on sale clause get called in 20yrs. WELL, guess what happened? We got called on it, pretty much immediately, and we had to switch back to our names.

We all carry good personal liability AND umbrella insurance in the event something happens we are hopefully well covered. I know some investors that swear by LLC for asset protection and I know some that have over 100 units that don't use an LLC or corporate structure to hold title and just carry MASSIVE insurance policies. There's pros/cons to both..definitely talk to a lawyer for your personal situation and comfort level.

As many have said here - your best bet might be to look into trusts (although there's some complications there as well) and taking possession as LLC will limit your lending options initially.

If you're just getting started, consider taking it in your personal names and look into good insurance. Then once you establish yourself and have equity and hopefully more $$$ you're options could open up using an LLC if that's the route you'd like to go.

Best of luck!