All Forum Posts by: Jameson Wildwood

The way it's taxed is identical whether it's in an LLC or not. The only way to change that is to elect SCorp or CCorp, but you don't want to do that with properties I've learned. So you get all the tax benefits just owning them straight.

I've since dropped that CPA, the scheme we setup above was too complex, and cost too much, as you mentioned. Since I only own 3 SFRs I own them in my own name, and carry liability insurance.

@Account Closed - What insurer are you using?

@Jacob Passmore - Progressive does my car, motorcycle, and renter's (I rent an apartment in San Francisco).  I used to use them for Umbrella, but can't anymore.  

I'm looking for a new Umbrella policy provider.  Progressive in California just nixed me because I have 3 properties, and their upper limit is 2.  Who did you get your Umbrella insurance from?  What was your cost roughly and how many properties do you have?  Was it easy?  

Thanks for the info!

Are you going to be living there? If you are doing FHA that's owner occupied. A lot of property managers won't do owner occupied FYI. The price is reasonable for the rent amount in Sac right now, so you have that going for you.

Your mortgage will be in the realm of $1500/month, so that's good that your rent will basically pay for your entire PITI. With expenses, repairs and maintenance, I bet you end up paying a few hundred a month out of pocket. Again assuming you are living in one of them. Classic house hacking. So you get to actually own a place and have cheap rent!!

Wish that kind of deal was available in the bay area.  

This would be a FANTASTIC feature on Bigger Pockets. To have vendor/ Turnkey provider and other such RE specific reviews.  Maybe you can help build it?

Here is what my CPA suggested that I do.  (Advice he gave to me only, so consult your own etc).  I would love a quick critique by anyone lawyerly (@GregBoots) and with a little experience with California.

I'm a California Resident

I have an LLC (#1) incorporated in Wyoming. Files with IRS to be taxable as a C-Corp. Files with California because I live in California and therefore the LLC is doing business in California. This is totally clear in CA rules.

I am an employee of LLC#1 and receive W-2 wages.

Here's the fun part. In order to avoid CA FTB, any out of state LLCs that own real estate are owned by LLC#1. All partnership interests, dividends and expenses are allocated to LLC#1. I pay myself wages from LLC#1. I also have loaned LLC#1 money and thus collect interest on the loans (as a way to pay myself without SE taxes).

Money I make consulting is paid into LLC#1 and I use that money to invest in property with anything beyond my "normal wage."

This is great news!

How did you make the decision for debt versus equity investment in the subsidiary LLC of the software company.

I'm essentially doing something identical, except that I get a 1099 to my LLC (taxed as C-Corp), and it did an equity investment in an LLC two years ago (before it was a CCorp), and I'm looking to make another couple purchases this year. Can you actually hold debt against a subsidiary LLC if it's a disregarded entity? Pros/Cons?