All Forum Posts by: Al Pat

@Ashish Acharya or @Natalie Kolodij would appreciate your take on this.

I have a LLC that is owned by my wife and I. Ever since it was created, we have elected it to be treated as partnership and pay self employment tax on income (if there is income in a given year). My current accountant prepares K-1 for my wife and me and then it goes to my 1040. I was recently consulting with a new CPA, and he suggested that I should change the LLC election by filing with IRS and have it treated as S-Corp. In his opinion, my wife can draw salary and pay tax on it as a general partner (depending on how much we decide) and then rest will be distributed to both of us (don't know in which term) and will count towards our ordinary income, saving 15% in FICA/SS tax. I know there are some very competent accountants here and I would like to know their opinion on this matter. Should I change the election of my LLC from partnership to S-Corp? or leave it alone? what is good for long term where I definitely will have profit every year on my rental even after claiming depreciation.

@Jane S. I have been played before and not played as well. Some tenants really made up excuses whereas others had legitimate reason. Send them an email stating you appreciate the heads up. Please advise how much you are planning to pay on 3rd. Balance will include late fee per your lease agreement.

Make sure to capture their text in writing via email or letter. This will be a record. Issue three day pay or quit notice on 11th.

Treat it as business and you will be fine.

@Patrick D Green Right after buying my duplex last year, I had to spend for new HVAC and then main panel. Now this is not my first property, so have a healthy return. However, if you don't have adequate reserve to let's say cover 3-6 months of mortgage payments ( this can be used for repair until CAPEX is built up, once you find tenant), then you should work on building a reserve.

@PJ Kolnik Most of my expenses were within a year of acquisition. One thing I did notice that properties purchased from fellow investors came with lot more differed maintenance than the ones I bought from owner occupants. This shall too pass, you just have to rebuild your reserve.

@Nadir M. I had my plumber replace six cartridges for the labor cost of $200 and I bought the material for $53. Cartridges it self is about $14, most plumbers will use Danco brand. Yes, you were ripped off.

What are your chances of getting this deal if more buyers gets whims of it? I think you are being very aggressive. I am all about relationship with seller. If she start feeling ill about you then even after you make her full price offer, she will choose to go with someone else who may have lower offer. Be careful how you push it. Real estate is a game of patience and relationship building. That is why I was able to buy two small multi family buildings from two different people who sold me their properties before. This was in last 30 days, both never been listed, no haggle but very friendly conversation and win-win scenario.

@Anita Parsa I bought two small multifamily because investor was diversifying into his new business venture and needed cash to fund that deal. If the number work for you then you should buy it. Given that all other conditions met about property inspection.

@John Morgan I’m like you, it doesn’t bother me either but unlike you, I add late fees. Business is business. No one is allowed past 20th of the month unless paid partial (usually 50%) rent. Under no circumstances past 30 days mark without filing for eviction.

@Dennis M. Why wouldn’t you? I have a tenant who pays late every month, usually by 9th or 10th because of the pay cycle. Adds late fee every month like a clockwork and has been a tenant for like five years, that is with normal rent increase every month. Why would I turn over the unit?