All Forum Posts by: Sebastien Hitier

@Pete Tallerico you are correct about interest NOT principal being an operating expense, and therefore only the interest not the principal portion being tax deductible. 

The webinars you watched simplify things as people need to understand first what cashflow generated by the property, as principal repayment makes it harder to be cashflow positive. 

The IRS taxes you on your income statement, the webinars are showing a cashflow statement. The difference is principal flows, which are cashflows from financing activities, capex when you do  a big investment, and amortization, which get deducted as expense but are not cashflows.

You pay income tax for 2017 when it is due in Apr 2018 for most US residents/person.

@Kerry Mertz , indeed, due on sale with LLC seems to have happened though very seldom. So you deed to yourself as trustee of the living trust, and then assign beneficary to your LLC?

https://www.biggerpockets.com/forums/311/topics/18...

http://www.creonline.com/beat-the-due-on-sale-clau...

https://www.nolo.com/legal-encyclopedia/making-liv...

The lawyers are really expensive, I'd advise to self learn about living trust before talking to one. 

I digitize receipts and book expenses immediately from mobile phone.

bank accounts have alerts for any withdrawal/receipt.

I check statements every month to deal with anything requiring attention, and update consolidated accounts only every six month.

Hey Anna, 

You need to be careful here, you are asking for advice on international tax to a law firm.

My experience when it comes to professional (legal/accounting) service is that the more you know about what you need, the more be able to (1) vet the professional and (2) ensure his prices are reasonable. 

When you don't know what you want and lawyer are not sure, they go for a expensive retainer.

For entity formation, in addition to the registration cost which is constant, A paralegal will take you $39 and do the work very well, a book written by good lawyers and explaining LLC will cost you $30, a full service lawyer will charge $200 to $400 to set you up.

But these are standard services to residents. Services for non resident are at a different cost level.

I had the same problem as you but from Hong Kong where withholding is 30%.

Given Canadian tax treaty with US, it seems to me that any Corp or Limited Partnership distribution to its foreign members resident in Canada will be 15%. If you buy a share of syndication, this 15% flat rate is probably how you will get taxed, withheld at source once you give a W8BEN to that entity manager. That's the option with 0 setup and ongoing cost, no filing in US.

If you create your own LLC or Partnership, you can elect to declare that income as effectively connected to US activity and file a US tax return for it. So there might be benefits with this approach, but it has a continuing legal and accounting operating cost.

I am not a professional, but can point you to some resources if you PM me, that should help you clue up before you ask a professional.

You tell us that you went to your tenant unit at night because his partner wants you to come as she was distraught, then you tell your tenant that you went there to talk about washing machine. 

You need to rethink your job as a landlord. This is not a white lie. Someone could get hurt over this if you keep on landlording like this for 20 years.

About your being a nice guy, maybe check the book: "no more Mr Nice guy", they explain that rewarding bad behavior will get you more of the same and make everyone feel bad in the end.

@Ryan D., indeed, how could I run a 20k+ mortgage close bill??

let's see, appraiser took 2100 for 5 properties and then charged 700 more for rental addendum and then 750 more when bank asked for second viewing after irma. That's 3500

Then close co, title insurance etc cost $7278, there is $2500 of closing fee and the rest if title insurance, lien search, surveys.

Then lender attorney asked for $4600 which is very rich, he found something that looked like a title cloud to him, and I had to hire an attorney to represent me, as there was a problem with a badly done florida land trust...

Being non resident non US person, I had only found people who would lend me at high rates such as 7.5%, so that 5.5% sounded less bad, but the cost of it all changes the economics of the deal, and it was disclosed at the last minute, the lender never gave me an estimate of that.

@Andrew Postell, I tried to go conventional, but being a non US, non resident person, I could not find an offer below 5.5% for a 30Y loan. 

This being said, I complained to the bank that being 5% upfront closing cost that was disclosed days before close was suddenly changing the economics of the deal and asked if we could raise LTV or lower rate, the VP there told me 6% was customary for such loans. I am not convinced and I ask biggerpocket as I think I should ask that lender attorney to get a haircut.

These are 5 SFH. I say commercial because they are owned by LLC.

Hello BP.

The best I could get for commercial mortgage with my credit and personal profile is 5.5% 5Y ARM. I am refinancing 5 properties at LTV 60%, loan amount is $395,000. Lender is a small local bank.

The DD took forever I want to check a few things:

• I was told there was $900 document fee initially, but I was never given an estimate of the total cost of loan
• last week, 1 week before close, I asked to see the HUD, and there are 20k of cost (lawyer fees etc).

While no number except appraiser fee and lender lawyer fee is shocking to me, I feel the appraiser ($450 per property+150 rental addendum) and lender attorney fees ($5000+) are really expensive given I went with my closing company.

2 questions:

• 5% of loan upfront origination cost seems very high to me, what is the normal range for commercial?
• I thought bank needs to show estimate of costs before proceeding. Is it not the case?

any other comment welcome.

Hi @Cody M. how did it come to be that way? Insurers should be able to give you a better price if you insure a lot of houses, isn't it the case? It would be interesting to tell us how you established those 23 insurance relations? 

The 23 properties are in which state?

Question also is how long 2 jobs will be necessary to funds the RE portfolio ramp up... @Fay S. at what price do you buy houses, how much do you spend on rehab and how much do they rent for? What would be the number of house at which you replaced the income from the 2 job?