Good morning BP:
I currently accepted an offer on a REO property (offer accepted is $87,000 + 3% closing) and will hopefully be closing in the next few weeks. I just have some questions:
Should I get a CPA for my taxes just for one investment property? If so, does anyone have a recommendation in Washington DC? or Maryland?
Should I just use an umbrella policy or should I form an LLC ($300 annual fee)? Also to transfer the title to LLC I will have to pay taxes on title transfer each time.
I'm going to go through a Property Management Group who handles evictions and such but should I get a real estate attorney on my side as well?
I would love to hear people's opinions on this.
IMO: People go both ways on this, but if you plan to continue investing in real estate, it's worth setting up a relationship with a CPA so you can maximize your deductions.
Over in CA LLCs cost $800 per year, I went with an umbrella policy and I'm happy with it. For your first property, an umbrealla should be sufficient, but once you get to the monopoly guy level, you might want to look into a LLC.
As for your last point, why are you looking into evictions?
@Jordan Thibodeau The eviction point was just an example, I couldn't think of any other examples for real estate attorney off the top of my head when I was writing this. I was thinking, much like the CPA, it would be good to set up a relationship with an attorney but I wasn't sure if this early in it would be necessary.
I think I will go with the umbrella policy for this first one. Two benefits this way is that I don't have to pay to transfer title and I don't have to transfer the title back to me if I was to refinance for my next investment property.
You could put some feelers out, but I wouldn't make that your top priority. I would focus more on deals and honing your tenant screening process.
Just finished my home inspection. He found an issue with the AC unit (very old unit that needs to be replaced) and flex duct in the crawl space. I got an estimate from HVAC tech and it will cost around 5-10k to replace. I talked to my agent and aparrently they will not repair the unit but they will reduce the offer price by 3k, to 84,000.
Personally, I don't think it's worth the hassle for just 3k reduction, which comes out to a savings of 600 bucks on down payment but will increase my out of pocket repairs.
I was just wondering if there are any recommendations on how I should proceed? I sent my agent a list of repairs so I'll be able to back out of the deal with my earnest money.
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