Skip to content
×
PRO
Pro Members Get Full Access!
Get off the sidelines and take action in real estate investing with BiggerPockets Pro. Our comprehensive suite of tools and resources minimize mistakes, support informed decisions, and propel you to success.
Advanced networking features
Market and Deal Finder tools
Property analysis calculators
Landlord Command Center
$0
TODAY
$69.00/month when billed monthly.
$32.50/month when billed annually.
7 day free trial. Cancel anytime
Already a Pro Member? Sign in here
Pick markets, find deals, analyze and manage properties. Try BiggerPockets PRO.
x
All Forum Categories
All Forum Categories
Followed Discussions
Followed Categories
Followed People
Followed Locations
Market News & Data
General Info
Real Estate Strategies
Landlording & Rental Properties
Real Estate Professionals
Financial, Tax, & Legal
Real Estate Classifieds
Reviews & Feedback

All Forum Posts by: Susan Wang

Susan Wang has started 2 posts and replied 17 times.

Originally posted by @Joey Hicks:

I spoke with my lawyer when, I created my LLC. He stated that as long as the LLC was family owned and you only invest in single family properties. Multi-family up to four-plex if you split it up into single units. You would be exempt from the franchise and excise tax. Speak with a RE attorney to be certian.

Any idea if LLC would still qualify for FONCE if it was managed by an umbrella/holding LLC?


Post: Agent telling me to increase buy offer. Is this normal?

Susan WangPosted
  • Rental Property Investor
  • Posts 17
  • Votes 10

@Kyle Danielson

Agree with others that this doesn’t inherently mean the agent is shady or not. In the seller’s market they are probably just trying to get your offer to stick in the first place.

If this is for a primary home, you’re also competing against emotional home buyers not just investors, which means the prices can be even more inflated since the numbers don’t have to work.

Escalation clause and appraisal gap are your friends in this market to help win offers. That way you can offer more up to what you are comfortable offering, but only if it is higher than the highest bid. Appraisal gap is also attractive in case the property doesn’t appraise and can help win over a higher offer without this clause (but just remember you would have to put more money down in this case if it doesn’t appraise so make sure it’s in your budget).

Post: LLC structure for california resident with Indiana properties

Susan WangPosted
  • Rental Property Investor
  • Posts 17
  • Votes 10
Originally posted by @Brandon Hall:

Here's the thing - CA has a very liberal definition of what "doing business" means and if you are deemed to be doing business in CA, you will be subject to applicable franchise fees. 

So if you have an LLC in another state and no LLC in CA, but you live in CA and operate from your home in CA (or an office or coffee shop or wherever in CA), then you will need to create a foreign entity in CA and pay the $800 minimum franchise fee.

Does everyone do this? No. Should you seek legal counsel if you intend to avoid this? Yes. 

You could potentially avoid this by granting an ownership stake in your LLC to a non-resident of CA (think friends or family). This person would need to be the general partner. You would be a passive partner, basically the money guy. At that point, you're not actually doing business in CA because you're not calling the shots. You would just need to make sure you can actually structure deals and your facts to support that strategy as it can hurt if you're caught red handed.

What do you think about WY umbrella qualifying for business in CA and paying the $800 franchise tax for that, but none of the property holding LLCs (since they are pass-through)?  That is what one asset protection company had recommended, not sure if that is true tax-wise. 

Post: NEW TO BP. BRRRR MOTIVATION AND SET UP

Susan WangPosted
  • Rental Property Investor
  • Posts 17
  • Votes 10
Originally posted by @Tricia Vitela:

Hey, fellow Lubbockite! 

We went with an asset protection firm that charges one upfront fee with unlimited LLCs. There is a small monthly agent fee for out-of-state LLCs though. Each individual LLC is a "disregarded entity" that holds each property and reports up the holding company, which reports up to the trust (for anonymity). I know some people think one LLC per property is overkill, BUT you can transfer the LLC to another investor purchasing inside an LLC, thus avoiding closing costs and the 2 year seasoning period.

At least, that’s how it was described to me; I’m excited to give it a try. :)

Which company did you end up using?

Post: Commercial umbrella vs personal umbrella for LLC

Susan WangPosted
  • Rental Property Investor
  • Posts 17
  • Votes 10
Originally posted by @Moises R Cosme:

Ryan, I am 99% sure you will need to go commercial; I dealt with a similar transition a few years back.  

Any insurance company you recommend for commercial?  I also think commercial is the way to go, to separate business from personal. 

Post: KKOS/ MARK KOHLER or ANDERSON ADVISORS?

Susan WangPosted
  • Rental Property Investor
  • Posts 17
  • Votes 10
Ideally this is a great idea, however I get worried about conflict of interest with no checks and balances.  If this is all within the same company, there could be incentive for the asset protection team to advise certain structures that result in higher fees paid to the tax team, such as extra returns needing to be filed. 

Originally posted by @Greg O'Brien:

Interesting thread.  One area where I think RE investors (or any business owner) would benefit is with integrated legal, asset protection and tax strategy/accounting team.  IMO, there are not enough firms on both the CPA and/or legal side that attempt to integrate these (through strategic partnerships).  Our firm went all in with a lawyer to integrate our client strategies and it has made 1) Our clients' lives easier 2) Legal compliance easier 3) Tax strategy bulletproof and consistent. There is no second guessing as all parties are on the same page and we feel our tax strategies are properly documented and some cases, maintained by our legal partner consistently and effectively. 

We found for years that a client would come in with sometimes conflicting or inconsistent advice because the lawyers don't focus on tax planning and the CPAs don't focus on asset protection. By combining the two (albeit at a premium usually), your overall planning should have a much higher ROI and you'll know that your asset protection and tax strategy mesh correctly.

Post: Idiosyncrasies of different markets

Susan WangPosted
  • Rental Property Investor
  • Posts 17
  • Votes 10

@Leonard Brown Thanks for the tips! Yes for sure, a boots on the ground team is definitely key to make long-distance investing work.  It is a seller's market which makes things difficult but numbers are numbers and they have to work.  I heard of some people putting in a $20k DD fee for a $500k property, to make their offers that much more attractive.  That's terrifying!  I need to mitigate risk so putting a huge amount of non-refundable money on the table definitely makes me wary, unless I am pretty confident of what I am walking into.  

Is there also an LLC transfer fee?

Post: Idiosyncrasies of different markets

Susan WangPosted
  • Rental Property Investor
  • Posts 17
  • Votes 10

@Jim K. Thank you for explaining!  I agree that the intention behind it is to weed out buyers that are not serious, and yes it does make long-distance investing more difficult, although nothing is impossible.  Just takes a better team in place to be able to mitigate the risk.  Thanks for your feedback! 

Post: Idiosyncrasies of different markets

Susan WangPosted
  • Rental Property Investor
  • Posts 17
  • Votes 10

@Jim K. There is a due diligence fee in addition to an earnest money fee in North Carolina, and both of them can be used to sweeten up an offer.  Due diligence fee is nonrefundable and this is prior to any inspection being done, so being knowledgeable about construction can only help so much without actually walking a property, hence why I brought it up.  Is that what you meant?  I didn't realize that most places had two fees, I was under the impression that they had earnest money only.