All Forum Posts by: Ryan O.

In my area radon is very common. In our area, If you have a home with a dirt or gravel crawl, especially split levels, you could almost guarantee without a radon mitigation system the levels would be higher than the EPA guidelines.

In my experience the presence of a system, or the need to install a system as a result of a home inspection has not had an impact on the sale price of any of our properties.

The last property we sold, the buyers inspection revealed elevated radon levels. We agreed to install a mitigation system and have the property retested. It was painless for us, aside from the $1300 expense, and the buyers were happy to know they will never have to deal with the radon. Plus the system has a lifetime gaurantee.

@Michael Noto I am actually going through this process on my personal residence.

This should go without saying but make sure you get multiple bids. I had the plumber I use for my rehab business bid the job, which was a 90 ft run if 1" type K copper from the shut-off in the front yard into my basement. Set the meter, and tie in the new service. I thought his $2500 bid was a little heavy, so I called out 2 more contractors they bid $4000, and $7,000 for the same work.

You have a couple of options regarding the way the pipe is buried. It can either be done in the conventional manner with an excavator, or if you have a lot of landscaping you don't want disturbed you can use a directional boring machine. With directional boring you basically dig 2 holes, one at the house and the other at the shut-off and bore in between.

Also, does the city have tap fees, or capacity fees that @J Scott alluded to, if so they may be a significant expense. In my case the permit fees, meter fee, and tap fee cost more than the $2500 plumbers bid.

Wendell De Guzman I'm interested to know what suburb is projected to have such a large increase in flood insurance cost. Just a guess, 60532.

Ryan Lundquist Or rebuttal went through the lender. The buyers were indeed conventional buyers with 20% down. In the market we focus on we have been fortunate to be able to choose conventional buyers over FHA or VA.

Ed O. That's exactly how it played out for us, we tried to dispute the appraisal by supplying better comps closer to our property, but the appraiser refused to even consider them.

We finally closed yesterday. We ended up giving up a couple thousand dollars just to get the deal done, but we were prepared to put it back on the market if we needed to. The buyers had to come up with the difference between the appraised value and the final contract price. In the end it worked out for us but we learned several valuable lessons, the most important being do not under any circumstances let an appraiser in your property without being there to educate them.

Bill Gulley Thanks again, I see where your coming from. Your right, at this point we are dealing with a few hundred or thousand either way, not worth making it any more complicated than it already is.

Bill Gulley Yes thank you. It was never our intention to initially fund the company with unequal capital, but use additional capital only as needed to fund acquisitions at closing. I think the best way to go is exactly how you suggested. Did my post above outline a reasonable course of action?

Bill Walston The blended rate for 2012 is 0.22%, could a structure be set up in which the majority partner lends the scorp say 200K with interest paid out at the end of the year. if the loan was for the whole year the corp would owe the majority partner $440 in interest. The scorp would provide a 1099-INT to the majority partner for the $440 paid.

If the company wanted to take it a step further could the minority partner then get a bonus of $440 for "management" at the end of the year. This would keep everything equal with income and distributions between the partners. The only small difference would be the SE tax the minority partner would have to pay on the $440.

Bill Gulley I like that idea, but wouldn't that potentially create a situation where the minority partner would end up with a much larger percent of their income subject to SE tax. For example:

Capital contribution split 75%/25%
100K total profit for the year
Each partner intends to pay themselves 50% ordinary income subject to SE taxes and 50% as a distribution.

Ideally each partner would have 25K salary 25K distribution. But according to Scorp IRS rules distributions need to be split up according to capital contribution (shares) in the business (75%/25%).

In your example if the majority partner wanted to keep his 50/50 ordinary income to distribution split, the minority partner would be forced to take 41.67K salary 8.33K distribution.

Steven Hamilton II
So we wouldn't have an issue if one puts in more capital the other more services, and stock was split 50-50. Distributions would then have to be taken 50-50, correct?

Is it a better/cleaner approach to have each partner contribute the same capital initially, but have the "money" partner loan the LLC/scorp cash to buy property interest free. The loan then get paid back when the property sells.