I have a foreign relative that wants to buy a vacation home in California. They would use it a few months a year and rent it out when not in use. Most likely a cash purchase. What is the best way to go about this?
- should an LLC be set up?
- what strategy has tax advantages?
- any seasoning needed on the money?
If cash deal, more than likely will not matter if your relative is US citizen or not.
Tax advantages...best to ask a CPA.
LLC used if they want to protect their personal assets from business assets. Yes, you can buy the property in a LLC.
I live in San Diego and might have something your relative might be interested in?
Thank you for the response! We live in Los Angeles and they will want to be close to us in Hermosa, Manhattan or Redondo Beach.
@Bob Couture If they're paying all cash, then there's really nothing special about the deal that would need to happen (no seasoning). Foreign transactions happen all of the time.
If they're financing, then whatever money they'll be pulling out of pocket just needs to be here in the states beforehand.
I'd suggest chatting with a CPA re: the LLC and tax advantages, but I will say that having an LLC has an expense associated with it so you'll want to make sure the advantages really do outweigh the cost of setting it up (~$700 /yr) plus the additional tax return.
If you need help finding a property, that is what we do. Connect with me and we'll get the ball rolling.
Thank you Joshua! It is in the talking stage right now and more importantly it won't happen until the ruble bounces back.
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