All Forum Posts by: Robert Steele

I believe this is already being done. A fellow investor college of mine sent me some info earlier this year on a website that was doing this.

Of course I was not interested in putting all the control in someone elses hands.

The macroeconomic trends that I have read about will not be helpful to real estate. I hope they are wrong.

In a nut shell, the sovereign debt crisis that has been plaguing Europe will eventually come to these shores. That means higher interest rates from a lack of bids for government debt. This translates to higher mortgage rates. In order to roll over loans at ever increasing interest rates local governments will increase property taxes. 

Both of these trends are not good for property values.

One of my tenants is a married man in his forties with a wife and two kids. He had a hard luck story and a solid guarantor. I said he would be trouble but my wife, who is the softy, wanted to accept them so we did. The honeymoon lasted maybe a year. The last year it's been chasing down late rent every month. Never again.

This related directly to me and one of my PITA HOAs that wanted to decide for me whether I could rent to prospective tenants or not.

HB 2489 (Leach) Relating to the ability of a property owners' association to enforce certain provisions on the lease or rental of real property. This bill negated certain rights of a homeowner and condominium associations to obtain basic lease information from landlords.

http://www.legis.state.tx.us/tlodocs/84R/billtext/html/HB02489F.htm

@Sam Leon

 I'm pretty sure that it is not every expense the building incurred. You are mixing in operating costs. This rule only applies to the repairs, maintenance and improvements. Basically if the cost involved a physical change it counts. If the cost did not impact the physical condition of the building then it doesn't count.

@Sarah Harris

Well when I went to sell it I calculated only $17K profit for a 2 month flip ($50K invested). I figured I could get that much from rent in a little over 2 years (I was already an experienced landlord). I've had it now for 5 years and it has made a lot more than $17K. I rented it for $1,650 and now rent is $1,950.

When I was a few years into building my retirement portfolio I calculated I would need 40 SFH. Now a decade later it turns out I only needed 9. Time is your friend. Mortgages go down, rents go up.

My advice; "Just do it" and "If you build it they will come" ;)

So what is the goal here?

You want the LLC to own the property or the loan? You took the loan out in your name so no luck there.

If you want the LLC to own the property I assume it is for liability reasons and not the feel good - hey I own a LLC - reason. You should have just loaded up on liability insurance and forgotten the whole LLC hype but that is another story.

Someone mentioned Land Trusts. They work in some states and not in others.

I think the easiest solution would be to just deed the property over (I'd recommend against using Quit Claim Deeds - just do a regular General Warranty Deed) to your LLC and do not record it. The lender cannot find out if it is not recorded and if you ever get sued you can show the dated and notarized deed.

That is what I did under the direction of my lawyer. But it was for estate planning and not liability protection and I moved into a Trust not an LLC so I don't know how this would hold up in a civil suit.

Thank god someone here is finally addressing this issue:

http://www.biggerpockets.com/blogs/6032/blog_posts...

Here is an example about the other aspect of these new regs. I don't know why everyone here is not going nuts over this!? To me this is a huge boon for Landlords.

Example: Sam owns a rental unit with a $300,000 unadjusted basis (that is, it cost $300,000). During 2014, he spent $5,000 on improvements, including $4,000 to install some new windows, an expense that would likely constitute an improvement that would have to be depreciated over 27.5 years. However, Sam qualifies for the small taxpayer safe harbor because the $5,000 he spent on repairs, improvements and maintenance is less than 2 percent of his building's unadjusted basis (2 percent x $300,0000 = $6,000). By filing an election to use the safe harbor, Sam may currently deduct the entire $5,000 on his 2014 tax return. This allows him to currently deduct the $4,000 he spent on new windows, instead of depreciating the cost over 27.5 years.

http://www.trulia.com/community-blog/rex_harris/2013/10/good_news_for_owners_of_smaller_residential_properties