All Forum Posts by: Will Wu

You can't just transfer with a quit claim deed. That will be considered a gift that you gave for free to your LLC. I think the only right way is to sell it to your LLC. Then you will have to pay for the taxes for this transaction that will cost a couple of thousands. So instead of wasting this money just do it right the first time.

You can setup LLC in another state and purchase properties in your state. The pros are you can choose a tax friendly states that provide anonymosity on LLC owners (the records are not public). Wyoming is one of the states that offers this advantages. The cons is you still have to register your foreign state in your local state and you will be paying double annual fees for both states plus if you use a register agent you will have to pay 2 register agents and you will hay to pay.

I tried to get a bank loan using the LLC but they will not even consider if the LLC does not have more than 2 years in business and proven income. No matter how many properties I can put as collateral. So to get a loan from a bank using a new LLC is very hard. I had to got to private lenders. With regards to asset protection. Having multiples LLC does not meant that you are immune to lawsuits. Anyone can sue you for any reason. But definitely it gives you legally more protection than having assets on your own name. The key to avoid frivolous lawsuits when you posses many assets is to structure it in a way that you can use it but don't own it. That is how all the wealthy people do. They don't own anything under their own name. They always have several trust and companies that owns everything they have. I don't put one LLC for each property because that will be a nightmare to manage. I do balance each LLC to hold assets values that I'm comfortable with.

In many cases you can register your LLC without any lawyers and without even paying on Legalzoom. Just fill the form and filed it by yourself at the state dept. And make sure to pay the annual fees every year. Then hire a CPA to file your taxes if yo know how to do your own bookkeeping on QBs.

I own several properties and I have created multiples LLC to hold these buildings. I strongly suggest to have your properties under multiples LLCs to hedge against lawsuit. Insurances will cover only a certain amount. Let's say if one of your row houses had a fire and the fire expanded to several of your neighbors houses and a couple of people died because of the fire cause by your tenants. You will be liable for millions that your liability insurance will not cover. In this scenario if there is a multi million judgment agains you it will limit to what your LLC has in its assets. Your personal assets and other properties owned by others LLC will not be at risk. If you plan to expand your portfolio having it under different LLC is a must. The cost to maintain a LLC depends on the annual taxes you paid in your state and your CPA cost to file taxes. According to my experience it will cost me $1000 to maintain each LLC. Also if you plan to form a LLC you must register it as a multi member LLC. A single member LLC is very tricky in some courts there has been cases that a single member LLC is treated as individual. On top of that if asset protection is your main priority it is recommendable to create an LLC as the property management that has no assets but is the main company that manages all the properties. Any liabilities caused by the management company will be directed only to this company that has no assets hence discouraging a lot of frivolous lawsuits.

I owned several Single Families and now I own only multi families. Single Families is easier to manage since the rent is higher and you have only 1 tenant to take care. Multi Families are much time consuming but the returns are higher and the risk is less since you are diversifying your investment into different tenants. If one does not pay rent you still collect rent from others whilst on a single family case you will collect nothing if the tenant does not pay rent. 

In West Palm Beach, FL  for $89K you can get a Duplex 2/1 each and collect $700 each for total $1400. So this is a so so deal in my opinion. Also I suggest you add at around $100 in miscellaneous repairs as part of expenses per month. 

You cannot deduct deposit from rent unless specified on the lease. Your lease have to have Liquidated Damages clause. I have a similar situation tenant rent is $925 and section 8 paid $750. He owes me around $300. I choose to work out and keep collecting as much as I can instead of evicting him for $300 because the money I will loose on evictions and getting another tenant will be at least 3 months of rent. I know the tenants rarely will delay payment on purpose cause if they are evicted most likely they will loose Sec. 8 support. But sometimes they are just too poor and don't have the money. As long as he can keep paying me bit by bit I 

Ive just went to a similar situation last month. I have a Duplex that I paid about $150K. 3 weeks after purchasing I have a tenant complaining of toilet water from upstairs leaking and flooding her apartment. I took immediate action and hire a plumber to tear down the walls, kitchen cabinets and replace the leaking pipe. A week after the tenant replied the flood started again and got worse. I sent a plumber again and we found out that another pipe under ground was busted probably with the pressure coming from new pipes. We had to excavate a tunnel underneath her aparment and change the whole pipe. Luckily this tenant did not called health department or anything. She just moved for a week and moved back when we fixed all the pipes. In compensation for all the problems caused I installed a new kitchen cabinets since the old one was contaminated with toilet water. Also painted her whole apartment and paid her cleaning fees. It cost me roughly $4500 to change the pipes and cabinets. This is what happens when you purchase old buildings. You never know when the pipes are going to bust so the best think if one could do is to change the pipes when the unit is vacant to prevent these headaches. I think it is crucial that then tenant feels that you took all actions necessary to fix the problem. If not they will call code enforcement or any other departments to complain and when these people get involved then things will turn much more complex and expensive.