All Forum Posts by: Aaron Zimmerman

Welcome @Shannon Spea! Congrats on your purchase in Milwaukee. A few thoughts:

1. For your Milwaukee property, try and get liquidity by opening a HELOC prior to moving. This can either help fund your next property or provide additional liquidity in case of emergency.

2. For chicago, how far would your commute be that you'd have to do 8 days a month? Ultimately up to your personal preference but that commute could drain you quickly and you might be better served by investing in a market closer to your employer and achieve similar results. 

3. If you're committed to investing in Chicago, the western suburbs are great areas to invest. The ones with more affordable price points for house hacking and with more available inventory would be Berwyn or Cicero. Personally, I love Berwyn and wish I would have invested there. It's a great working class area. For more info, connect with John Warren. 

#4: I'd get plugged into local networking groups as well as facebook groups when you come here to fast track ability to buy a deal. There are tons of great realtors and lenders, which is where you'll want to get started. On the lending side, I'd recommend Mike Facchini with Fairway Mortgage. 

#5: Listen to the straight up chicago investor podcast. You'll learn about the local market very quickly and there's some great guests they bring on. Tom and Mark are a wealth of knowledge. 

Let me know if there's any questions you have. Happy to help offline. My background is being a former house hacker and real estate CPA.  

@Briley Roe your cpa is incorrect.@Julius Vincent is spot on. You have had four flips and it'd be hard to say you're not in the business of flipping.

 I agree with the s corp recommendation provided you continue to foresee yourself flipping for many many many years. Otherwise, probably not worth it if this is a one and done thing. 

In addition to what was provided above with maximizing deductions, you could create a solo 401(k) plan and contribute up to $70k in there. However, this limit gets combined with your other w-2 so be careful there.

Based on your comments, I'd consider interviewing other CPAs that know real estate.  

I think it's a great move if you can pull it off. You're learning valuable skills at a young age and reducing your housing expense while at school. The best option would be to sublet to an intern.

one thing you should do is get plugged into local facebook groups so you have people you can call when issues arise at the property. 

@Danielle Robinson welcome! There's a lot of commercial real estate in Chicago. I'd consider starting with some smaller mixed use properties. Myself and a partner recently purchased a 5 unit mixed use in Belmont cragin and has been going pretty well post rehab. Happy to connect! 

id also get plugged into local events and the straight up Chicago investor podcast. 

@Todd Goedeke how well do these handle under audit?

@Eli Norden - welcome! Did you end up using the section 121 exclusion?

 Also happy to connect with another cpa and talk shop. Feel free to PM and get a time on the calendar 

A lot of investors have a certain amount of equity in each LLC. For each, let's say you buy 10 lower priced homes ($100k or so) and 75% LTV. Maybe you put 5 properties in the same LLC for liability protection.

Some mistakes I see people have are commingling assets (LLC and personal) which is a big no no. If you commingle the assets, you pierce the corporate veil and can effectively negate the benefits of having the LLC because if you're sued they can also now go after your assets too.

Totally agree. While it's important to loop the cpa in, it's not the only thing. It's like going to the doctor and them telling you to do certain things and then you as the business owner not doing it . 

Redfin for sure. I find it's probably a touch high though 

You would want to use current rents to estimate. Life events happen so you never know when you'd need to move out. 

the goal is for you to save money by house hacking when factoring all the wealth levers of real estate (cash flow, appreciation, tax benefits, and loan paydown). 

I would recommend using the BP calculators to see if the property would cash flow. I would use rentometer for rent estimates