All Forum Posts by: Steve Smith

One thing you might wanna consider is setting up a trust for your kids. It can be a solid way to pass on assets while you're still around or after you've passed. Trusts can offer some tax benefits and allow you to specify how and when your kids receive the assets. 

Plus, they're pretty flexible, so you can tailor it to fit your situation and your kids' needs. It might be worth talking to a financial advisor or estate planner to see if a trust could be a good fit for you.

Devil is in the details…

I would want to see as many years budgets as the seller has available and a copy of the most recent reserve study. Also community rules, rental restrictions, pet restrictions, occupancy restrictions - anything that could interfere with your operations. 

As to "taking control" you'll have to wait until there are board elections (typically annually although usually for part, not all of the board) and run yourself and people you control for the board seats. It will take years to take over the board and in that time I predict you won't want to. You'll find some people there who really care, know the history and you'll want to keep them around. 

Depends. If you have good cash flow on your properties, there is an argument to kill some of the debt with high interest of high K factor (large principal, small interest payments).

Also depends on what other investment opportunities you have to just invest the money you're getting.

There's an argument to have some houses free and clear and a few with high leverage... safer.

Hey @Charles Adams, 

please consider your asset protection. A quick and dirty way to get started is to checkout this tier list I made below: 

Worst:

– No coverage, held in your name.

Bad:

• Relying on insurance. This is the most basic level of protection and it is not very effective, but it is still better than nothing. Insurance companies have many exclusions and they may not cover everything, but they can help to pay for some of the costs of a lawsuit.

Good:

• Using one LLC for all of your rental properties. This is better than relying on insurance because it protects your personal assets from liability. However, if someone sues you and wins, they could take all of your rental properties.

Better:

• Using a separate LLC for each rental property. This is the best level of protection because it isolates each property from the others. If someone sues you and wins, they can only take the LLC that owns the property that was involved in the lawsuit.

Best:

• Using a combination of LLC and land trust to protect your rental properties. These are more complex legal structures that can provide even more protection than a traditional LLC alone.

Here are some of the key things to keep in mind when choosing an asset protection strategy for your rental properties:

• Your risk tolerance: If you are not very worried about being sued, you may not need the best level of protection. However, if you are worried about being sued, you should use the best level of protection that you can afford.
• Your state laws: The laws governing asset protection vary from state to state. You should consult with an attorney in your state to make sure that you are using the best asset protection strategy for your situation.
• Your budget: The cost of asset protection can vary depending on the type of protection that you choose. You should make sure that you can afford the cost of the protection that you choose.

Passive Activity Loss 

@David M.  @Steve Smith

https://www.journalofaccountancy.com/issues/2023/sep/passive...

Basic JoA article for bedtime reading....