All Forum Posts by: Tyler McDaniel

For some reason I am not receiving my sms keyword alerts. I set them to only sms and no email and I’m still only getting the notification through email. Please help!

@Madeline P. I know this is an older post but I am looking to do flips and brrrr deals in the Tampa area. I’m looking for contractors so when I get a property under contract I’ll be able to jump start. Any help would be appreciated!!

@Ashish Acharya Awesome, I really appreciate all the insight! Thank you so much!

Originally posted by @Ashish Acharya:

Originally posted by @Tyler McDaniel:

Hey Everyone,

So I have a few private money investors that want to be part of my deals.  We are going to structure the deal where they loan the money and get interest until the sale or refinance.

We want to hold the money in my LLC account until it is deployed into a property but what are the tax implications of this? What if we have a Promissory Note spelling out exactly when interest will begin to accrue and maybe another Promissory Note for when the property is purchased so there will be collateral.

I know legally it can be done but tax-wise how would this be done? 

Thanks!

I am in the same boat. It is pretty simple. 

From a tax perspective, there is no impact whether you have a  collateral or not. Also, there is no tax impact until you sell the house. 

Simplified steps:

1) You collect money, put it in your LLC. execute an agreement among the investors regarding interest rate and when it is due. The payment schedule has not tax impact( lump sum at the end of the deal or every month)

2) if you are flipping this property, you will add the total interest that will be paid to investors to the cost of the house (basis). 

3) When you eventually sell the house, you will get to deduct the interest expense as the part of your basis in the house. This decreases your profit. 

Remember, you just can't deduct the interest in a year you pay it if your flip starts in one year(2018) and finishes in the next year(2019). You have to wait until you sell the house to get a benefit of the interest expense. 

Thank you!

So if the investors want to hold the money in the LLC account before a purchase that will not change anything correct? As long as all of this is spelled out in our promissory notes?

@Ashish Acharya

Thank you!

So if the investors want to hold the money in the LLC account before a purchase that will not change anything correct? As long as all of this is spelled out in our promissory notes?

Hey Everyone,

So I have a few private money investors that want to be part of my deals.  We are going to structure the deal where they loan the money and get interest until the sale or refinance.

We want to hold the money in my LLC account until it is deployed into a property but what are the tax implications of this? What if we have a Promissory Note spelling out exactly when interest will begin to accrue and maybe another Promissory Note for when the property is purchased so there will be collateral.

I know legally it can be done but tax-wise how would this be done? 

Thanks!

Hello Everyone, I plan on using the BRRRR strategy; buying a house for cash and rehabbing, then refinancing. I’ve read a lot of people saying that lenders won’t lend to an LLC for conventional financing and that you will have to get commercial loans. Is there a way you can personally guarantee the mortgage and hold the property in its own LLC for asset protection purposes? If not would my best bet be to find a small bank who will financing these deal who doesn’t sell the mortgages to Fannie and Freddie? Thanks for the help. I’m looking to invest in the Tampa, FL area.

@Junior Picancowere you able to get conventional financing even though your properties are held in LLCs? That seems to be an issue I heard and that people say you have to get commercial loans. Thanks for the help!