All Forum Posts by: Phil B.

If you're forming a holding LLC in WY to hold your rental real estate for the anonymity for lawsuits and tax advantages, would it be counter productive to include your name in the holding LLC name? For example "Smith enterprises" is the name of your holding LLC, does that ruin your anonymity in terms of lawsuits?

I am under contract on a complex that has a 20 year HAP in place for low income independent seniors. My half of the capital for the purchase is coming from a 1031 exchange. Since I am partnering on this new complex deal, we needed to form 2 LLC's with tenants in common to satisfy the 1031 requirements.

HUD indicated that the HAP would need to be assigned to a single entity, so we'd have to form a holding LLC for the 2. We were planning on forming a holding LLC anyway, since we own 2 multi family properties in separate LLC's on the east coast.

What's the best way to go about forming this holding company? I was told Wyoming was the best place to do this for anonymity and tax benefits. Does anyone have a recommendation for a company that forms holding LLC's in WY and acts as a registered agent? What are the fees associated with this? Thanks

What's the best way to form a holding company in WY? Currently have 3 LLC's that own multi family rentals on the east coast. I was told WY holding LLC's offer the best protection and anonymity. My understanding is you need a registered agent in that state. Does anyone have a company they use that they can recommend?

Dan - I sent you a PM - I am closing on a complex with a 20 year HAP currently in place. It is for low income independent seniors, no medcial component. The HUD paperwork has been a massive undertaking, I completely miscalculated the amount of time it would take to not only put it together, but HUD's long slow approval process. I am under a time crunch because this is a 1031 exchange for me. Worst case scenario, i'll have to come out of pocket for the first months debt service. If you proceed with this, I would get in contact with the HUD POC as quickly as possible and have them send you everything you need to submit. Not only did we have to put together a binder with 27 items, but we have to submit all of it electronically through a HUD system called APPS. The most surprising part, is it takes up to 10 business days to just receive log in credentials for this system. From there, it gets even more cumbersome.

@Scott Titus

The property I'm purchasing does not have these profit restrictions you mentioned, so I'm afraid I won't be much help on that. The property has a 20 year HAP in place for low income seniors, other than the income requirements, there is a HUD inspection every 2-3 years. I think you're talking about a tax credit property, I'm not familiar with those.

I was curious to know if anyone owns a similar senior housing property with this type of HAP contract.

@Scott Titus

Is your a deal a LIHTC?

I'm closing on this property in a few weeks - this is being bought with traditional bank financing. The financing is completely separate from the HAP contract for the property, HUD is not involved in the loan. There is no limit to how much I can profit, I think you're referring to some sort of tax credit where owners are limited on profit. I'm not familiar with profit restricted properties.

I'm under contract on a 24 unit, independent senior housing complex. It currently has a 20 year HAP in place with an annual 1.4% rent increase. It currently has a waiting list and is a 7% cap.

Someone mentioned to me that 20 year HAP's are bad because expenses on the property will only go up (for example taxes, and if the area sees growth then presumably maintenance and repair labor will go up), and cannot raise rents enough annually to keep up with those growing expenses.

Does anyone have any insight on this? Or does anyone currently use HAP contracts as a strategy, or own independent senior housing with a HAP in place?

bump

I know this is an older thread, but I posted about a similar deal and wanted to know if anyone had any insight on this.

I'm under contract on a 24 unit, independent senior housing complex. It currently has a 20 year HAP in place with an annual 1.4% rent increase. It currently has a waiting list and is a 7% cap.

Someone mentioned to me that 20 year HAP's are bad because expenses on the property will only go up (for example taxes, and if the area sees growth then presumably maintenance and repair labor will go up), and cannot raise rents enough annually to keep up with those growing expenses.

Does anyone have any insight on this? Or does anyone currently use HAP contracts as a strategy, or own independent senior housing with a HAP in place?