Justin Silverio
LLC w/ S Corp Election vs. C Corp w/ S Corp Election
21 November 2011 | 18 replies
They are the same thing from the IRS' perspective;- From a legal/asset-protection standpoint, the difference is between a corporation and an LLC, and from a legal/asset-protection standpoint, the election of s-corp is meaningless.So, while I'm certainly no expert on this topic, make sure that when you talk about the differences between the two, you specify if you're referring to the tax implications (no distinction) or the legal/entity implications (likely big differences depending on statute, structure, number of owners/members, etc).
George P.
"No FHA loans" remark on a listed SS
10 November 2011 | 7 replies
OK well if it has an HOA then that's a distinction that doesn't really matter for these purposes.
David Beard
Turnkey sellers - why are expenses ignored?
26 November 2011 | 50 replies
On commercial properties there are many reasons why a properties full information is not disclosed.1.The property is a vacant REO building and has no numbers besides taxes.2.The bank or receiver took the property over recently and no data was given to them by the old property management company or by the previous owner for adversarial reasons.In these situations you price in the worst case scenarious to be safe.3.In commercial you get many off market properties because the seller doesn't want the sale made public.4.The seller has demanded that minimum info be listed on the listing and only when a buyer is qualified as credible and serious and has signed a confidentiality and disclosure disclosure agreement then the info will be shared.The seller might not want the information of how their property is operating to get into the competitions hands.I do agree that many investors will keep different reserves based on individual preferences.Where this comes in big though is there are industry averages where unless the buyer will be paying all cash or owner finance they will be getting a loan from a commercial lender.This commercial lender will price in reserves to the numbers and marketing costs because if the lender giving the loan has to foreclose they will operate it and value it based on their expenses and not the owner who self manages,does their own pest control,makes their own repairs,etc. to increase margins.This is a number one reason loans do not get funded.An investor shows a deal cash flowing 5,000 a month on a apartment building and the numbers are real.However the commercial lender comes to 3,500 a month cash flow after their analysis of how they would run it an dhow it would perform if they took the property back.This is why owner finance and putting little to no money down to preserve liquidity is the name of the game.Leveraging yourself into as many properties as possible UNDER THE RIGHT TERMS with smart growth taking advantage of the down markets is key.We have real estate niches for a reason.There are different flavors for everyone.It also depends on the investors goals.If they have millions already and are just trying to get a certain return and stay above inflation each year with not much headache then yes turnkey might be the answer for them.If you are going to do that I would go for triple net corporate rated tenants and collect mailbox money than deal with toilets,tenants,and termites,and eviction headaches.I deal with this on my apartments but my returns are way over 7 to 8%.So what you take on versus the expected return is key to doing a deal or not.I find generally landlords once they hit a certain age and life just get tired and want someone to take over their problems.This is when at 36 I still have gas in the tank and I am willing to take on big headaches for big returns.Later in life that might change what kind of portfolio I want to hold and grow.I personally stay away from buyers wanting these little houses for 35,000 that give off 700 a month rent.The investors are out of state and want you to micro-manage for them at 60 bucks a month and it's not worth it.I own many apartment units and even with a maintenance guy and a property manager living on site it can be very intensive to run correctly.It is not as easy as everyone thinks it is especially when most investors will be buying older buildings on value add deals.It's easy when a building is brand new and tenants want to sign up left and right and there are little to no repairs to speak of.When you buy new though you pay a premium for it.If you want to create wealth you need accelerated returns.I have really enjoyed this discussion so far.
Abdenour Achab
Should I expense or capitalize post acquisition eviction costs
19 December 2011 | 8 replies
Ebere,I must distinctly disagree with you as IRS rules and regulations state that all expenses in preparing the property for rental activity(defined as listing for rent or actually renting which ever comes first) are added to basis.He inherited the tenants when he filed for the deed of a home in which as he stated the intent was to flip.
Jeff S.
Buy and hold partnerships, one in town...
31 January 2012 | 34 replies
Any suggestions appreciated.There are two distinct types of financing and both require your and your money partner's ROI requirements and risk thresholds.One: An equity partnership is where operating partner and money partner have an ownership stake (title) in the property.
Jeff S.
Instructions Form 1099-misc
2 February 2012 | 18 replies
I feel that this one may be trying to avoid declaring income based upon their distinct rejection of receiving a 1099.
Sean H.
Collecting late payments via Credit Card
20 October 2014 | 22 replies
I didn't study the Dodd Frank areas dealing with CC, but there were changes, I don't know if you can, but it smells like it may be contrary to the current flavor of consumer rights to me.
Jeremy Namen
Neighborhood Revival
17 October 2012 | 55 replies
Let’s hypothesize: Split your RE operation into two distinct lines of business 1.
Ibrahim Hughes
Question About IRS Liens
21 November 2013 | 19 replies
Ibrahim S,It is distinctly possible that it may be able to get it discharged.
Harold Wimberly
Question about Private Money Loans for Real Estate
5 February 2013 | 28 replies
Yes, there's some that only do non owner occupied but it's not a monolithic among hard money lenders so the fact that we're debating that point shows some want to be message board know it alls instead of just giving feedback.Saying the lender owns the property is a distinction without a difference.