All Forum Posts by: Jonathan Newsome

@Brian Pulaski sure, I agree with that as well, but as investors we know that we’re taking on a certain level of risk. The idea is to minimize/reduce that risk and that can be done by having the right teams and people in place. That’s like buying an auctioned property, then pulling back a wall to find horrific damage or mold. Sure you can miss it, but the goal is to be thorough.

@Dylan H. But of course there is and I understand the full use of it, but I’m just trying to figure out why the need to walk themselves as opposed to using their “team”. It’s honestly a waste of my time and resources if I’m bringing along market experts such as contractors, agents and photographers and getting detailed information for the buyer, if they’re just going to walk it themselves out of fear.

That’s the reason I quoted the book, that paragraph resonated with me and THOSE are the type of buyers that I need to work with; they know exactly what they want, they’re serious and let numbers and “proof” guide their judgement, not emotion.

@Theresa Harris thank you for you reply. While I agree that there are plenty of scams going on out there what’s the point of having a boots on ground team, such as a contractor, agent, and photographer etc if they’re not going to fully utilize them, especially when we have extensive footage and experienced personnel on the team...

Here’s my question, are there investors out there that actually buy property without having seen them physically themselves; buying without stepping foot in and walking the floors?

The reason I ask is because when I was doing some wholesaling a little while back (I still wholesale), I would take tons of High Quality pics & shoot high quality videos, but no matter what when I sent them to my “investor buyers” they always insisted walking the property themselves... Because of this I began to place these “buyers” on a lower tier buying list (as in non-VIP buyers), especially after having read David Greene’s Book “Long Distance Real Estate Investing”. There’s a paragraph from the book that I’ll include here.

“people feel uncomfortable buying a property they can’t see in an area they don’t live in, and fear has a lot to do with it. The thing is, you aren’t buying a home; you are buying a small business—an investment. There aren’t many reasons to feel so afraid if you’re looking at things from an investor’s perspective. Investors focus on numbers; consumers focus on feelings. Going beyond our gut feelings as real estate investors forces us to get serious about our guidelines.”

The “Investors” on my list aren’t out of state either, they’re local to the area. You would think (at least I would) that if they were seasoned investors and they had plenty of pictures and videos and a great boots-on-ground person that they might not have to walk it physically, but I guess that’s just my train of thought.

What are yalls thoughts on this?

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@Tom Donnelly very interesting and inspiring!! Would you by chance be interested in another SFR in Virginia? Have a sub-to property if you're interested, potential for CashFlow.

@Ashish Acharya Thanks for the in depth reply, I appreciate the guidance!

The LLC is indeed a SMLLC. I'll definitely speak with a CPA very soon as my conversation with you proved that I indeed need one.

I did have one other question that has to do with S-corps, I can't find the answer anywhere online. I understand as an S-corp, there's the distribution piece and the salary piece. I know that as an employee of the corporation/business, I am responsible for paying FICA taxes on the wages I make. As an owner/shareholder of the Corp, the distribution is not subject to FICA. My question is this:

If the wages paid to me as an employee were $50,000 - with FICA being 15.3%, would the full amount of 15.3% come out of my wages OR would I only pay 7.65% and the corporation pay the other 7.65%?  I know this is probably a silly question, but basically - is the full 15.3% already figured into the employee salary or is only half withheld and the other half paid by the employer at a later date?

@Carl Fischer

Thank you for your support Sir, I do appreciate it.

I'm glad to hear that it would be the lesser amount of the two (after JV amount).

I’ll definitely be reaching out to a CPA and figuring out the best strategy for my current situation.

From a few books I’ve read, I know that you’re absolutely right about keeping a few rentals to help offset active income through depreciation. Thank you for the assistance @Carl Fischer, I’ll get to work on the bits of advice you’ve given me.

I started wholesaling this year under an LLC. I've been setting aside a percentage of my wholesale checks specifically for tax purposes. I'm also a w-2 earner, being employed by the US Military, which makes me a part-time wholesaler (not that it matters in the governments eyes)... Here's the break down of what I'm looking at:

To date My LLC has only generated $39,400 in revenue. I realize it's not much - haven't done more than a handful of deals...

Now, if I've done JV deals and paid out monies from the revenue that was generated (received by check in the LLC name), would I be responsible for taxes on the TOTAL amount generated or what was kept AFTER the payout? Out of that $39.4k - after the JV partners got paid, my LLC has actually made only $29,200 in total revenue. This was MY actual amount.

Going to talk about the w-2 wages now, as I don't mind talking sharing that info - military pay is public information any way. Total predicted wages for the 2019 year are $46,000. Total expected taxes withheld YTD are approx $2,200. Since profits made from wholesaling are counted towards ordinary income- would I be adding the $46k from my w-2 to the $39.4k (before JV payout) OR the $29.2k (after JV payout). Please understand that I'm aware there's more to it such as taking deductions like home office expenses, marketing, education, business mileage/trips, amortization, etc...

Also, when would it be wise to restructure as an S-corp, taking a w-2 salary from the corp?

Hi RVA Investors! I'd like to introduce myself, my name is Jonathan, and I'm with JS Capital Investments, LLC. I'm a local real estate investor, currently working on a rental, but do wholesale a lot. If you're interested and would like to connect, you know what to do.

Additionally, if you’re actively looking for a specific type of property or in a certain area, let me know and I’ll be your boots on the ground, grunt. That’s the wholesaler in me. I’d love to hear more about you and how I can help you get to where you’d like to be. Hear from you all soon!