All Forum Posts by: Scott Mac

Hi Dino,

The attorney may have a written questionnaire that you can fill out to address these issues, and like Greg said, just rely on the attorney for this.

Good Luck!

Hi Carla,

If it were me, I'd sit down with the potential partner (over a business meal to make it a little more relaxed) and discuss upfront the things that the two of you think might cause the partnership to go wrong. Get those questions out in the open and try to solve them ahead of time.

You can discuss:

• Profit splits.
• Depreciation splits.
• Who is going to pay for what percent of the startup costs.
• Who is going to do what.
• What happens if someone cannot do their part.
• What happens if someone does not do their part.
• Who will cover any losses.
• What if one person cannot cover a loss.
• How will you handle any added money that is needed in the future.
• etc...

Then when you have some of that hashed out, both sit down with an Real Estate Attorney who form LLC's and talk to him about it.

Good partnerships are about good communication.

As far as splits, rather than think what is good for you, maybe think what is (fair) for her, and go from there. That might give you some additional thoughts in this very important subject.

I like Olive Garden after the lunch rush.

Good Luck!

Hi Kevin,

Make time for an inside lunch at a fast food, eat where you drive, and check out who comes in to eat.

It will give you an idea of what the neighborhood is like.

Good Luck!

Hi Jacqueline,

They probably found a place with a little lower monthly payment, or a layout they like better.

Meaning they will be moving into somewhere, they just want out of their first decision with you.

If you tell them NO, they might just move in as intended, and you will have 12 months at least before you need to deal with this vacancy again.

The only other scenario I could see would be a military location move.

Good luck!

Hi Kevin,

Discuss it with (your) tax specialist, because the IRS has guidelines as to who is Independent Contractor and who is an Employee. You don't always get to choose.

If they come back  at a later time and define him as an employee and you have not withheld taxes on him, they will go after you for it.

Good Luck!

Hi Robert,

You do not need an accounting degree to be an investor. They will not teach investment accounting to you there.

To understand the accounting involved spend some time (and some fees) with a local "Real Estate CPA" and ask them to explain investor accounting to you.

Before you do this:

• Understand what a chart of accounts is for an LLC and a Sub-S Corp.
• Understand how depreciation works for rental housing.
• Understand what a 1040 is and what schedules an investor may need. 
• Skim the IRS instructions for depreciation.
• Read Rich Dad Poor Dad (if you have not already), while not a true to the book picture of accounting, it is a good way to think about it.

Basically you want to know how the cash flow and depreciation flows onto your personal 1040, and what is the best way for an investor to work with a CPA.

And knowing a CPA that can assist you in your investment business is better than paying a college to teach you how accounting works. 

Let the experts do their thing--and you do yours.

Good Luck!

Hi Faraz,

Chickens are loud but some people don't mind them, but eggs are cheap.

Emotional support chicken--with a doctors note--OK, but undisclosed up front.

Emotional support chicken is a new one on me.

Good Luck with whatever decision you come to on this.

Seems to me the logical starting point would be the county tax assessor's office. 1977 probably means searching microfiche in person.

The tax appraisal would probably be lower than the actual market value at the time, which would increase your gain on the sale.

If your county follows a % less than fair market value for the tax value, that would probably zero you in on a higher received cost.

Hi Tandi,

I'd be careful, because this person may actually show up in court and be able to make expensive stalling maneuvers. 

If it were me, I'd make certain that my attorney was in the loop on this and follow their direction (exactly) as to what to do. Just go by the book 100%.

Have you considered cash for keys?

Good Luck!

Hi Earl,

To cut the risk, I'd start by visiting a Chase office and discussing the plan (show it to them as a bulleted list of the credit you want) and see what they have to say. Then go to Capital One and get their opinion.

As they say, straight from the horses mouth.

Good Luck!