All Forum Posts by: Roan LaPlante

Mostly junk. The most common useful thing is usable furniture.

Probably the most valuable thing I've found was maybe $200 worth of untouched insulation material

I have a highly specific legal question regarding Ohio business law. I have noticed many other investors here from Ohio.

My wife and I were married yesterday. We now wish to convert my real estate holdings to holdings jointly held by both of us. We signed a prenuptial agreement that describes precisely the allocation of the real estate assets in the event of our divorce. I hold an LLC in Ohio. It appears in Ohio, the articles of organization do not include the LLC's members, but rather its name, effective date, purpose, and registered agent. We do not need to alter any of that information because none of those things are changing, but only indicate to the secretary of state and the IRS that the LLC will now be held by two members. My understanding is that I need to file with the IRS a change of entity classification. However, I can't figure out if I need to file anything with the secretary of state in Ohio. There is no option on their filing website to do anything except file an amended articles of organization which allows to change the company name, effective date, or purpose. This filing would cost $50. One website indicated that it was possible to amend the members of an LLC by filing the articles of organization and additionally providing an 8x11 sheet of paper indicating the change in membership. Is this necessary? It seems to me that if we simply file the tax entity selection with the IRS and eventually file the taxes to Ohio as a partnership that they require no additional information about who actually owns the business beyond the agent they communicate with, presuming that we have valid internal documents.

I seriously doubt it. I have never purchased an investment property that was not all cash, and I have never purchased an investment property that I could not afford to replace three times over with my own personal funds. That may someday change. Regardless, my standards for evaluating this situation are not nearly as high as what I have myself done.

Yes, I do believe that paying rent, building no equity, and saving some cash reserves is a better long term strategy. Having a no cash position on a house you are hacking is a very bad idea. A foreclosure puts you out of a home as well as the rental cash flow. If you get foreclosed on your nothing down SFR and you lose the investment, well it would be preferable to have some room in your budget, but worst case, fine, you lost your investment. You didn't also lose your primary residence.

I see that you do not agree. I appreciate you voicing your perspective.

@Irina Belkofer if he doesn't have a good enough cash position, it would be irresponsible of me to suggest anything other that that he can't afford it.

I would never consider making improvements to a building that I did not own yet under any circumstances whatsoever.

I think the error you made is in taking an FHA loan. FHA loans suck. For investors they doubly suck. In a situation like this, if you can't afford to put the necessary money down on a conventional loan instead of the FHA loan you got (and can't find a hard money partner), then I would say, oh well, you can't afford the property then and have to pass.

That is true that getting estimates in Boston/Providence involves making a lot of phone calls to contractors that don't even show up.

If you like the property, consider a conventional financing instead.

This sounds like a bad idea from a perspective of keeping your family happy (and keeping the government out of your parents estate planning). I wouldn't worry about the tax benefits of deducting interest from your mortgages on your rental properties in your particular situation.

The main question I have is what your parents feel like doing, the tax benefits aside. Will they ever want to use this house for any purpose ever again? Will they feel like you manipulated them if you take the tax benefits for yourself?

If they don't want the house ever again and would be happy to gift it to you, then that's fine. But the point is, if that's not really the way they understand the situation, we're not talking about an earth-shattering tax break here.

Hi,

I purchased an old 6 unit apartment building in very poor condition which will require extensive renovations that probably will require some months to complete. I will need to completely redo the electrical wiring (and the plumbing, and install new furnaces and water heaters, and so on).

My question is this, is there any good reason to get the utilities for each apartment in my name and pay it until the building is rented out, or just get them turned on shortly before tenants get there? The total cost, for example, of just paying the electricity company's service fees of $15 for 6 accounts for 6 months, is around $500. That's not a ton of money, but is it necessary since the period of renovation is likely to be rather long?