All Forum Posts by: Shane Duncan

Shane -

Typically, when you own rental properties through an LLC, the income and expenses associated with those properties flow through to your personal tax return. A single-member LLC is considered a "disregarded entity" for tax purposes, meaning that the IRS disregards the entity, and you report the income and expenses on your individual tax return.

It's common for investors to use an LLC for liability protection and to keep their business and personal finances separate. However, the tax treatment may not change significantly in terms of reporting income and deductions.

The idea of using the LLC as a management company is interesting but may not be necessary for the purposes of deducting expenses. Typically, you can deduct legitimate business expenses associated with managing and maintaining rental properties directly on your Schedule E.

Depreciation, advertising, insurance, interest, lawn care, and other relevant expenses can be deducted as part of your rental property business.

Hi Shane, I have several recommendations: JV, Equity Sharing, Lease option, Sandwich Lease, owners financing with Wrag around, and Novation, to name a few..... But here is my first option:

My recommendation involves thoroughly analyzing the seller's financial and tax situation to determine whether receiving a lump sum payment is more beneficial than periodic payments. Suppose you find that regular payments are advantageous for them (which is the case for most landlords with several properties). In that case, you can then articulate the benefits of seller financing to them where they do not take the income all in one year and lessen the tax budesonide by spreading it for a few years.

If they push back and need more icing on the cake, consider offering an equity share arrangement. Such an arrangement could be modest, ranging from 1% to 5% for the seller, and would only come into effect in the future upon the sale of the property.

Sellers will likely have concerns regarding the assumption of liability. In this case, you can introduce the concept of a wraparound mortgage as a solution. A wraparound mortgage could mitigate their liability concerns, as it involves creating a new mortgage encompassing the original one, offering layered protection. This strategy addresses their apprehensions and demonstrates the potential for a secure and beneficial arrangement for both parties involved.

In the end, if it does not work, partnering with someone with the funds to buy it with you would be my second-best option! Better 50% of it than 100% of nothing! Good luck!

Hi Shane,

I do investment loans everyday for people and it is really a simply process. If you have a good credit score and a business entity, you can use the equity from for your primary home to make up the difference in down payment. Or you could find a partner to put up the remainder. A DSCR loan requires no personal income documents, it is based on credit, reserve funds and property income. I would also suggest you reach out to someone who has experience in the BRRR method of investing. Reach out to @Jorge Vazquez he has a wealth of knowledge and would be very happy to speak to you about this method and how it has worked for him. Good luck to you. 

As someone already mentioned, is seller financing an option? Many people who are looking to simplify like seller financing for the passive income stream.

@Shane Duncan

good luck and keep us posted.  something is not adding up, if you're trying to offload a portfolio you would not spend $120K in repairs, you would just sell it as is.

@Shane Duncan

yep, don't need the address or even the city.  was just looking for the expenses.  financing, taxes, insurance, deferred maintenance, groundskeeping, shared utilities, property management...

like i said, i'm skeptical that it will truly cash flow as much as you think it might.

@Shane Duncan

can you post the numbers?  if this is on market, and wasn't immediately snapped up, i suspect it may be in a more challenging area...

Moving in to the property for a year is by far the easiest answer. You have more than enough to do that. 

Otherwise it’s families/friends/partner/sell stuff/personal loan/borrow against something else or see if someone will do a 2nd for 10%. 

But moving in is 100% the best deal for you, the easiest and most rewarding. The others involve more risk or less reward.