All Forum Posts by: Paige Rob

wow....thanks to everyone, I knew the answers but I had to level set to make sure I was not missing anything

Yes I know PM#1 should issue a 1099. They are not a new PM company, they are not small and they are in a metro area.  Another thing they do that I don't understand is charge me per unit for some type of insurance. This past year it really went up to close to $200 and that is on each unit. Annually I ask what it is for and no answer other than for an umbrella liability policy to benefit all clients.

PM#2 should report to me the actual income they received from my tenants. For the past 2 years I had my tax preparer make the adjustment because it was wrong but I don't want to again especially for this amount. I do understand the differences caused by fees, etc. that are income collected outside of rents. 

Again, thank you all.

Of the several property mangers I have there are 2 that do 1099's differently.

One manages 2 properties and does not issue a 1099. Annually I ask and annually they tell me that their owners just use the income from the end of the year statement. I do but this seems odd.

The other will only report on the 1099 the income disbursed to me (my owner draws) and does not include the rental income they collected that is sitting in my account that has not been disbursed. Why is some money not disbursed? I'm letting money accumulate there to do big updates on one of the units (ac, flooring). So, for example, 12k was collected but only 6k was officially mailed to me leaving 6k of my money with the PM for expenses when realized. This would be the 3rd year in a row where my 1099 does not match the actual income they received on my behalf from my tenants. What should the 1099 reflect?

Thank you for the feedback.

I am struggling to see/understand the benefits, if any.

Maybe they are beneficial if you are only investing in the state in which you live?

Can someone provide more context to statements like: our loan will never report to a credit bureau because it is a private loan so DTI will not be affected....won't it show on a fraud credit report, the deep dive report?

also, within same context: we have some investors with over 100 investment properties in their LLC and those loans never affect the DTI analysis.

So is the LLC doing it's own business taxes like a C or S corp and therefore the properties are not on personal taxes on a schedule E? So when seeking to refi say a primary and the client has and LLC, don't they disclose the nature/business of the LLC?

I'm trying to understand the pro's and con's of using LLC's. I have several rentals I purchased years ago with loans on them to me. I live in CA and the rentals are in other states, not here. If I understand this correctly I can either form an LLC in each state and also have to pay CA a franchise fee for each LLC at $800 a year or form one LLC in NV or DE for the investments/investment loans. Either way, I then have to treat the LLC as a C or S corp, do taxes on that, have it reflected on my personal taxes not on a schedule E and still have the CA fee. A savvy lender will never want to deep dive into the LLC that is for reflected on personal taxes that holds real estate investments?

If anyone can shed light on any of this, I'd appreciate it. 

I am wondering if anyone has ever worked with or successfully done business with rentalhomefinancing.com.

Desperately need advice.

Long time investor...husband and I purchased rentals during the years of 2001-2006, all have mortgages in our name. Working on first of several blanket loans and it requires to close to an LLC.

Have 2 LLC's that were created under a different lenders requirements, did not close the loan and LLC's never used but created, in good standing, have EIN's. They required 2 DE LLC's: LLC#1 my husband and I are 50/50 partners and LLC#1 is sole member of LLC#2 which will be the borrower for the loan and it is a disregarded entity.

Since the expense has been incurred and we are set with another lender, and since LLC#2 is registered to do business in the states where the rentals are located we would like to use the setup.

To date I am a Real Estate Professional, this is what I do full time and my husband holds a job.

I believe that there will be no issue taking the loan to LLC#2, changing the deeds when the loan closes from us to the LLC and that income/loss will pass through to LLC#1.

I believe that since LLC#1 is a partnership that again we still will continue to report income/loss to our personal return and I can continue to be considered a Real Estate Professional.

I am concerned about a few things in how we are to state them in the operating agreement for LLC#1. If my husband and I are 50/50 partners, and it states that income/loss is passed onto the members based on their % of membership; DOES THIS CHANGE ANYTHING ON HOW THE INCOME/LOSS IS CALCULATED ON OUR PERSONAL RETURN AND CAN I STILL BE AN REP?

Not all properties will be absorbed into the blanket loans/LLC#2.

I do not wish to change how we report the rental activity, but the type of loan requires an LLC. I want to ensure we can pass through all income/loss through both LLC's to us and I can remain an REP.