All Forum Posts by: Robert Buck

First rental was SFH 3/2 Bought for 60k Rehab for 7k Rents for 1k could go $1100 but great tenant at 1k Just refinanced and appraised at $124k Our key points for criteria was a good working class neighborhood that we could put sweat equity in and very importantly stay well below 70% LTV with the ARV. Crucial if you want to do many properties. BRRRR.

So I know I need to talk specifically to a Cpa/legal to which I have calls into but it's tax season and I'm still waiting phone calls back. I wanted to ask this question. Here as there is a wealth of knowledge and I like having a general answer/idea when I ask questions. So opinions and answers from here will hopefully get me insight to further discuss with the cpa when I get a phone call back. I work a full time W-2 job with $106k last year I live in WV I bought 2 buy and hold rentals in MD in 2016 Currently just put our first potential flip under contract where is where the questions come in. Everything I've read and talked with says to setup an llc and elect s corp tax status for the flips, my question is should I set that llc up in WV where I live and pay income taxes or should I set it up in MD where it's doing business. If I setup in WV I'll have to foreign register in MD and do annual reporting in both states. If I form the llc in MD am I gonna get stuck with paying taxes in both states?

Just a further observation, if you were to cash out the 401k's you're going to pay your current tax bracket as well as the penalties. Just guessing if you're in the 28% bracket and get a 10% penalty which I believe is the minimum, your going to loose 38% right off the top. Which is about $72k on $190k. How long would it take a rental to recoup that just to break even? Where as a 401k loan or SDIRA you won't get taxed on and no penalties. If you decide to go the 401k loan route you'll be paying the money back to yourself with no tax implications plus paying yourself around 4.5% interest on the loan.

Why couldn't each of you do a 401k loan? You can borrow half of what's in there or up to $50k from each 401k. You don't get the tax penalty and you pay yourself back over a 5 yr period at about 4.5% interest to yourself. May tighten cash flow for the first 5 years but buy and hold is the long term game.

I know all of my leases and the ones I have seen list the approved residents of the properties and explain that no person other than those on the lease the can stay any longer than 7 days. I would say most likely depends on what your lease says. My tenants have the right to request additional people added to the lease at which time I have the right to evaluate rent rates.

It is fairly common to sell what is coined "turn key rentals". A trending type of flipping is to flip to investors. Buy a property that one can renovate and get rented that will cash flow and then sell it turn key with a tenant and PM in place. Advantages can be like you said it seems pretty easy for the buyer (you). But the more important thing is the numbers and tenant qualification. Was the rental recently renovated, quality of the Reno, how well was the tenant vetted, and if the property management is part of the deal, what quality are they. Absolutely nothing wrong with buying turnkey if the above things were done correctly. If the tenant is new ask the PM to see the application. Post the numbers up here and you will get an non emotional opinion of the quality of the deal.

Mike thank you for the reply. I believe I have a vm from you. I apologize for the delay in getting back to you. I just got back in country and my phone was stolen while in Cozumel so getting that dealt with and back to technology took a bit. I'll be reaching out. Thank you again.

Thank you Casey sending you a PM

State to state and bank to bank are different on many things but I'm relatively confident in saying that you would not be able to be the appraiser on any purchase, sale, or refi that you would financially be a beneficiary of.

quote was $290/month does that sound right to all of you?