All Forum Posts by: Robert K.

I'm looking at buying a triplex and I just got the sellers ROI numbers. They are paying $250 a month for a dumpster. This doesn't make sense to me. I also checked the city website and it shows that trash pickup for that address is on Thursdays. I own another quadplex and I don't pay for a dumpster. Is there something I could be missing or misunderstanding why the current owner is paying for a dumpster?

I definitely recommend getting an LLC to protect yourself. Many lenders will have no problem with you deeding the property to the LLC. I own 2 rental properties, one SFH and. quadplex. I used a Texas Series LLC. The loan is in me and my partners name, but the property is owned by our LLC. So we have a great 3.25% loan for 15 years.

My insurance, etc are all in the name of the LLC with no additional expenses. You just have to do thorough research and find the right bank, insurance company, etc.

Hello,

What type of insurance policy do you usually carry for a quadplex? I'm getting different messages. Some say I can have a traditional policy and others say it must be a commercial policy.

With commercial, theft apparently isnt covered??? Is this correct?

Please advise.

P.S. If you're in the Dallas / Fort Worth or Texas area and have a suggested agency, please let me know.

Jody,

I do have q TX Series LLC setup.

Mine is setup the way your attorney suggested.

Primary LLC is the mgmt company. It has it's own Federal EIN, own bank acct
Series A owns property A. It has it's own Federal EIN, own bank acct.

I'm buying a 2nd property soon. I will be getting another federal EIN. I will have my attorney draw up the series operating agreement for the 2nd property listing me and my business partner as owners, etc. We will take both the EIN and series operating agreement to our bank and have an account created.

Benefits. It saves you from going to state of Texas to create LLC everytime and gives protection.

Annoyances. Maintaining separate accounts. Ultimately, I want protection. I coud have achieved it with separate LLCs, but I didnt want to psy $300 to the state for every property I acquire. Like they said, this has not been tried in court, but maintaining separate bank accounts and not commingling funds is the safest way to protect yourself based on the law as it is written.

Thanks everyone. I decided to hold off on this purchase. I'll look for other opportunities.

Thx!

I am looking at purchasing a duplex and struggling a bit with the numbers.

They are asking for $115K for a 2700 SF Duplex in Dallas. I expect 20K in repairs. The tax value was $215K in 2009 but dropped to $162K for 2010 and that is where it still is. The property brings in $1,700/month but will be unoccupied when I purchase it.

I am considering a 15-year loan at 5.99 of $108K. Excluding the use of a management company, I am looking at $185 net cash flow but only $50 with the use of one. With a 30-year loan (which I won't do), cash flow is more like $300/month including the use of a management company.

Using the 2% rule, I am at 1.25% in terms of rent as a % of purchase price. Granted that the 50% rule assumes a 30-year vs. the 15-year loan, I still think the numbers are a bit low. What do you think? Is this a good deal?

Your input is greatly appreciated!

Hello,

I recently got my first rental property in Jan 2012. My 90 year old uncle deeded the property to my LLC for free. I inherited a long term elderly tenant who has been in the home for 20+ years. She pays a very cheap $335/month. I chose not to raise the rent on her since she has very little income and has not missed a payment according to my uncle.

The taxes on the house (tax valued at $24K) for 2011 and 2010 were around $650. FYI, the highest this house has been taxed in the past 10 years was $33K in 2008 and 2009.

I just got the property taxes 2 weeks ago and the house is now being assessed at a tax value of $40K. That has increased the taxes to $1050.

I did get the roof replaced without coming out of pocket in February due to leaks for $3000. That is all that has changed in regards to the home. From my understandings of this particular counties appraisals process, they got and take photos from August 2011 - Dec 2011 to assess the tax value. With that being the case, I would think all actions taken from 2012 do not play a role in the the tax appraisal process. Am I wrong to make that assumption?

I've read up on the country tax appeal process and am ready to protest. I don't see how a home could go up almost 90%. I spoke to a friend and he thinks that since the see that an LLC now owns the home, they just jumped the taxes up. My plan is to get a realtor to look up the sales comps in the area and if that backs me up, use that to protest the taxes. Any other suggestions?

With the tenant only paying $335/month and taxes (and insurance) going up, I need the taxes reduced or she will have to sadly start paying more money. I'd like to prevent it via appeals if possible. All suggestions are appreciated.

Thanks!

Hello All,

I paid a real estate attorney to set up a Texas Series LLC for my real estate rental business. I am treating the main LLC as the parent/holding company and have placed one property that is paid for in one of the series (or cells). I had the attorney set up 2 EINs, one for the parent and one for the cell:

1- EIN #1 for the parent was set up with my business partner and me as the members

2 - EIN #2 was set up for the cell but he also set it up with my business partner and me as the members

EIN #1 was setup just fine. EIN #2 is where I am having issues; I had hoped that a separate EIN would further establish the series' independence from the management/holding/parent company but, with my partner and I as opposed to the parent listed as members, we now have to file a separate tax return for the series when I wanted to treat it as a disregarded entity for federal tax purposes and just file one return for the parent.

Had the attorney set up the series with the parent as the only member in the series, the cell would automatically qualify to be treated as a disregarded entity. My attorney, however, is telling me that naming the parent as the sole member diminishes the asset protection argument of a series since we want to do as much as we can to distiniguish the two entities, not tie them together.

Could someone advise on how things are normally set up in this case:

1 - Do we need 2 EIN's with us being listed as members of the parent only and the parent being listed as the sole member of the cell?

2- Are we complicating it too much and do we just want to deactivate the EIN for the cell and just file under the parent?

Please note that cell only holds the deed to the property but all the accounting records and bank account are under the parent's name with separate records

Has anyone here used Wave Accounting (http://www.waveaccounting.com) instead of quickbooks online? It is 100% FREE. I am a new investor and have 1 new property and am planning to use it to minimize my expenses. I just signed up for this today.