All Forum Posts by: Tino Julian

So...bottom line, I've got some decisions to make AND I guess I gotta find a good CPA and/or attorney.  Thanks guys...I knew I could count on BP to get me the info. I needed.

Hey BP Community,

I've got a pretty straight-forward tax question (BUT...all my internet research has not been able to give me a clear-cut answer). I have an LLC and was about to apply for an EIN on the IRS website but they ask "how many employees are involved in this company?" What are the tax advantages of filing as a "Disregarded Entity" vs. a Corporation?

I know this is a pretty basic question but I am just getting started in Real Estate and don't want to get hit with a HUGE tax bill at the end of the year.  I am also in the somewhat unique position in that I have two family members who can help me with this business (although I am going to be doing the bulk of the work).  When I enter "1" on the IRS application it says "for tax purposes your business will be considered a 'Disregarded Entity'" (with the explanation of what that means).  When I enter "2" it tells me that my business will be considered a "Partnership" and when I enter "3" it tells me that it will be considered a corporation.

I completely understand that by listing my LLC as a corporation, I am adding additional forms and accounting headaches to the mix, but is there a distinct TAX ADVANTAGE for doing this? If I go the "Disregarded Entity" route, can I easily switch to a "corporation" at a later date (when the business grows)? Finally, someone recommended an S-Corp to me but this sounds even more complicated (from a Tax standpoint) - has anyone got experience with this & WHY would I want to go that route?

Thanx. 

Great advice...Thank you John D.,

On the 1st issue, I have talked to a few neighbors (who weren't aware of her current whereabouts or living arrangements).  There is ONE particular person (who is the neighborhood matriarch) who I'm pretty sure would know how to reach her (but so far I haven't had any success tracking her down either).  I guess I'll start going "door-to-door" until I find someone who can point me in the right direction.

On the 2nd issue, I now have the name of the city official who originally "yellow-tagged" the home, so I guess I'll give him a call & see where that leads.

Thanks again! 

AWESOME Advice.  Thanks everyone.

John D. - you are ABSOLUTELY right (it wouldn't be the 1st time I've gotten ahead of myself).

David Kang - thanx for the advice, the referral and your offer (I'm sure I will be contacting you as I begin to navigate this whole process). 

Mindy Jensen - thanx for the advice on getting referrals & smoke remediation. I actually do KNOW how the fire started (the owner was smoking in an upstairs bedroom) so I BELIEVE the damage is fairly minimal (and contained) but someone I know said to me "oh, there's smoke damage, forget about it, the smoke permeates EVERYTHING and the only way to get rid of the smell is to gut the entire house (which is why I was worried).

CK Hwang - that you for validated what I was thinking.  Yes, even if I "screw up" there should be PLENTY of $$$ left-over.  I'll have to do a more detailed analysis as I move forward, but the house was bought in the 90's for  2 1/2 times LESS than what the low-end of the market is doing for that area (so it SEEMS pretty-well idiot proof to me).

Thank you EVERYONE!

Ok BP Community, I am brand new to the world of Real Estate Investing (and I need some advice).   I recently became aware of a house near my work that MIGHT be acquired at a significant discount.  I have seen the inside of the house and I know that it is in fairly good shape (although recent smoke damage probably means gutting the entire inside right?).

How do you decide whether to Flip or Wholesale a property?

I was going to try to Wholesale this property because I have heard this is the easiest thing to do for someone like me (just starting out in this business with very little money, and NO resources to buy the property outright) BUT there is SOOO much equity in this property that it almost seems like it would be a “no-brainer” to Flip this house.   Is it crazy to try to do a Flip on my 1st investment?  How hard is it to find Hard Money Lenders to accomplish this? 

Also, IF I do decide to Wholesale this property, can the price be negotiated (or is there a standard percentage)?  It seems silly to me to pass up a potentially HUGE “pay-day” simply because I have never done this before.

Ok BP Community, I am brand new to the world of Real Estate Investing (and I need some advice).  I recently became aware of a house near my work that MIGHT be acquired at a significant discount.  Because the owner of the house has let the place go a little bit (due to a recent meth addiction), the city has “yellow-tagged” her home for health reasons and she was forced to move-out approx. 3 months ago.

My questions are these: 

1)   How do I gain an interest in this property BEFORE it goes into foreclosure?  I have been trying to track down the owner but so far have not been successful). Any advice on tracking her down (last I heard she was living with friends)?

2)   Because of the “yellow-tagged” status do I approach the city first to see what can be done (after signing a contract with the owner) or go directly to the mortgage company who by now is moving ahead with the foreclosure process?

Any advice would be greatly appreciated.  Thank you!