All Forum Posts by: Wes Phelps

Quote from @Megan Templeton:

Hi there! @Wes Phelps

if you are going to actually live in the home, I wouldn't use an LLC. You get many benefits as a primary homeowner but in order to qualify it has to be your primary residence and title has to be in your name. When the home is in an LLC, the property is technically not owned by you (its owned by the LLC) so you cant claim homestead, get the tax breaks, etc. If you have no intention of renting it out, leave it in your name so you can save on taxes. If you moved it into an LLC to claim business expenses but didn't truly rent it out like a business, in the event of an audit, the IRS would see the LLC as a sham and hit you with all kinds of issues.

Thanks,

-Megan

 Ahh okay, thank you!

Check your DMs

Quote from @Zeona McIntyre:

Hi Wes, 

You've got a lot going on there and I'd suggest simplifying and focusing. It's sounds like you want to get into Real Estate Investing, if so I would not suggest getting into running a retail shop. It sounds like a distraction. You wife could manage the property for him but it sounds like it might be better sold and to use that capital for other investments. 

Medium-term rentals or travel nurse housing is an excellent strategy. I suggest starting with the units you have access to near the hospital, furnishing and getting rolling on those. You have a lot of the elements you need: a good handyman, and experienced property manager, now just get a dependable cleaner. Run those for awhile until they are smooth and you know you like the strategy before looking at acquiring anything new. If you spread yourself too thin you won't move forward and you may make more mistakes. 

LLCs are tricky for acquisition since they need to have their own credit and income history to be able to buy. Maybe if you can roll some of those properties into it and show income for a year you can get some sort of portfolio loan. 

Lastly I just want to make you aware of the Physicians loan. It is a 100% financed loan or $0 (aside from closing costs). You can only get one per person but I believe I counted 3 doctors in the group so that might be a cool thing to look into when you move into the acquisition phase. 

Good luck!

Thanks for all the info, and you are correct, there is a lot going on. Luckily Mo has a separate contract with the local hospital I mentioned, so he does have his own LLC's and about 2 years of contractual income from it. Same goes for Mo's wife, who also kept her maiden name. He had mentioned there is some bank rule surrounding that, so ill take it on his word.  I have the handyman, but I do not specifically have a cleaner, so I will look into that.  Again, thank you for the insight! 

Morning all, my name is Wes, I have been in Finance and Financial Services for about 10 years and have decided to branch out and explore what else is out there. That being said, I've been an avid BP podcast listener for the past year or so. My best friend and I have always talked about getting into real estate but have essentially been halted by our profession as well as paralysis by analysis (at least on my end). Keep in mind my friend, Mo, is also a doctor, and his wife is a surgeon. So cash flow isn't as much a worry as I'm sure it is for most. 

That being said, we have a couple items id list to start tackling. The first item is Mo's dad has a building that is paid for and vacant. We were thinking about putting some sort of store in the location, but cant nail down a specific product(s). Our thought is potentially a Vape shop, but don't have any connections regarding a supplier. So the first question is, where would be a good place to start looking for said supplier? Also, is this a good industry to get in? Id say we have a leg up on most because we don't have a building to pay for, so margins should be favorable. Cant say for sure until we can get in front of a supplier. 

We also have several properties in our home town that Mo's dad is willing to sell/gift to him. This would allow us to take rental income for the time being, and potential look at more of a residential development project in the future. There is a University and Hospital within walking distance. Mo had his residency at this particular hospital so we would push for our tenants to also be residence or traveling nurses of the hospital.

Luckily I have another buddy, Mike, who can fix just about anything and has worked with contractors for a number of years. He would be my go to if things needed fixed. 

For myself and my wife (who is a property manager as her 9-5), we need to be the eyes and ears on the ground since Mo currently lives out of state. Im not sure if I need to create an LLC as a property management company, or if we can fly by the seat of our pants for the time being. That would be another question I most likely need to ask my CPA.

Lastly, I will be the one in the acquisition of new property. So that is something else I have been looking at and speaking with local realtors. My only question is how do I become a liaison in a deal if Mo is not available to make a decision? To me it sounds like I would need to be a co-signer of some sort under his LLC?

Im currently working on a business plan that breaks down responsibilities, expectations, and pay. Just so there is no muddy water. This part I can handle :)

Summary: 

Is a Vape shop a good business to look into? If not, what is another good industry with high margins?  (gift shop/coffee shop/etc)

Is the creation of an LLC more beneficial to start now, or can we wait?

Best way to proceed with a business transaction if Mo is not available?

I appreciate any help offered!

Best, 

Wes P

I appreciate the info! 

I actually did see this on TikTok, but also in my profession I have seen this idea used as well. I however, do not know the ins and outs so I figured this would be a good place to start. My wife and I are expecting our first child and are getting more serious about looking for our "first time home purchase". The question is from a expense/tax stand point... Regardless of what we find (single family/multi family), is it more advantageous to purchase the property through a business, like an LLC?

From what I understand, there are several tax benefits to doing this? Is it as easy as creating said LLC and using the credentials to do so? Id expect from a bank standpoint there would need to be income history to even qualify? I'm sure there are things I'm missing here, but I don't know what I don't know.

Tips and help appreciated. 

-Wes