4-plex Co-op?
Hi! This is my first post, so here goes. I just bought my first 4-plex. It's in Cedar Rapids, IA. The purchase price was 113,000 and I put exactly 20% down. Each unit rents for 495/month... quick math would make one think that that's a decent cash flow each month. However, the taxes are almost outlandish at 5700/year. That's almost an additional 500/month towards my escrow.
I have heard that converting my 4-plex into a "housing/residential co-op" could reduce my taxes by about 60%. So a few questions: 1. what does that mean for ME as owner. I do not plan to live there. 2. I realize up front cost would be about 1200 or so, so would it be worth it? Any experience with Co-ops? 3. would it really reduce my taxes by that much or is that a bit of an embellishment?
Also, I currently have a sole proprietorship for construction. Would it behoove me to convert this to an LLC? I have one other rental (a townhouse) in Virginia and I have a single family home that I reside in.
I'm looking for all the advice I can get! This is my first investment property... I became an "accidental landlord" with the VA townhouse. I do use a property manager for that one, but initially, i do not intend on doing that here in Iowa.
Thank you all in advance and can't wait to dig into these forums! Have a great day!