All Forum Posts by: Troy Otte

Sounds great, thanks Todd!  Small world.

Hello Todd, I seem to only h e seen this message now. I guess I need to update my settings. Sorry for the late reply! Great to hear you’re still having meetings. Might there be one coming up?

and yes, we did move into that area in La Verne...you’re in tune with the activity 😁.

All the best, Troy

Hello Todd.  I'm new to La Verne, we just moved from Florida where I was did a few real estate deals.  Looking to start up out here.  Are you still having virtual meetups?

Thanks, Troy

There is no debt on the property. Good question for sure. 

And I think I would be limited to selling to someone that could pay cash or had alternative financing besides agency debt probably because they would be buying the ownership in the LLC that has title to the property. Not sure though.

Hello BP community! I have a rental property that is owned through my partnership LLC (my wife and I each own 50% of the LLC). I have interest in selling the property if I find someone that want to purchase a rental property with a solid tenant and good cashflow. Is it possible to sell the ownership in the LLC, instead of selling the property itself?

The rental property owned by the LLC is a good performer...market value of about $300K and generates NOI of $20K annually. In a great neighborhood, with a solid, long-term tenant who has expressed interest in staying for a long time.

This would avoid all the normal transactions costs of selling a property. Instead, I could sell 100% of the ownership in the LLC and simply have the purchaser takeover control of the LLC.

Thanks in advance for any feedback!

Thank you Natalie. I was sure I was missing something and I think you helped clear this up. Despite the HELOC interest not being tax deductible, #3 in my post still applies, but that is only limited to the amount of profit that the LLC can earn. It helps, but not crazy good until I get my real estate business much larger.

Thanks,

Troy

I'm curious if anyone has re-evaluated leaving properties under an LLC given the new tax law allowing for a 20% profit pass thru deduction on personal taxes from the LLC. Personally, this adds an additional 0.75% operating margin to our rental property annually. It's not a ton, but as profit increases over the years, this will become more and more. Anyone else evaluating this as an addt'l reason to keep in the LLC vs under your personal name?

Hello BP community. New to the site and first post. Given the recent changes to the federal tax rules/rates, I have a question regarding funding investment properties with personal (HELOC) money lent to my personally-owned LLC. Here's the idea:

-My wife and I own our primary residence with a good amount of equity. We also own a rental property in a LLC owned entirely by us paid for in cash worth ~$300K.

-We're looking to either purchase a property to flip, or another rental property, and like being able to use cash for the transaction for the speed of closing, negotiating power, and lower transaction fees. We will buy it under our LLC name for the legal protection, and now the tax benefit since the recent tax rule changes regarding pass-through entities.

So, here's the idea. We could get a HELOC on our primary residence for the funds needed to buy a property. Establish a loan agreement between ourselves personally and our LLC, whereby our LLC borrows from us personally at a normal commercial loan market interest rate. The LLC uses the funds to buy the property. Here are the benefits I think it provides:

1. We will get a lower interest rate on a HELOC than on a commercial loan. Let's say we pay 5.8% on the HELOC (today's rates on Bankrate.com). We could lend it to our LLC for 8-10% interest and make money personally by lending the HELOC money to our LLC at a higher interest rate.

2. The interest on a HELOC is not tax-deductible (under new tax rules), but the interest paid on a loan by our LLC is. So, we'd be able to deduct the interest on the loan from us personally inside of our LLC.

3. By making the purchase through our LLC, we're able to take the first 20% in profits as a deduction on our personal income taxes due to the recent tax rule changes on pass-through entities.

I hope the above makes sense, and there's a chance that what I'm suggesting violates laws/rules I'm not aware of.  Looking for the community's insight and knowledge.  Thanks in advance for any feedback!!