All Forum Posts by: Bill Walston

Michael, I strongly recommend that you check with a local attorney before preparing a deed that you are not signing. In most states, preparing a legal document to which you are NOT a party is considered the unauthorized practice of law. Even if it's totally legal, why put yourself at the risk that one of the parties might later come back and sue you for some "error" they think you may have committed? Better to wholesale your deal and move on. But that's just me :-)

Originally posted by Bill C.:

Bill Walston,

I'm curious... is that 7 deals in the last 9 months with commercial or single family?

Thanks,
Bill Champlin

Sorry Bill, I missed this earlier. All 7 deals were 10+ units, closed using a master lease option.

Marcello, I'd suggest that you request an explanation be given you in writing. I don't see how an escrow account fee can be "standard service charge" if no escrow service was used. Did you have them hold a downpayment or any other funds for you?

Originally posted by Mike Nelson:

UPDATE: Now the seller is filing a lawsuit against me for a breech of contract after I went to paypal to get my money back. I have a feeling that this is going to be a big headache.

oh please! After he refused to sell to you he's filing a lawsuit for breach of contract?? By jove, he must be a lawyer ;) As long as you can document where he refused to sell then it is he that is in breach....

This should be interesting! Keep us posted!!

Congrats on forming your LLC! I'm glad that you're not making the mistake that so many folks do by thinking "that's all there is to it."

You should not have to register a "fictitious" name. Your company is an LLC and so there's nothing fictitious about the name. You MAY have to register and get a business license however. That varies from state to state. Your local city or county clerk will be able to give you that information.

Your LLC needs an operating agreement. This is true, even if you are a single-member LLC.

Get with your tax pro to hash out a good tax strategy. He/she will best be able to advise you on whether you should accept the default tax classification or make a corporate tax election for your entity.

As Jon said, you should get an EIN before opening your bank account. You can apply online here

Hope this helps!

Originally posted by Ed O.:

I heard that if a person puts their primary residence in a trust and sells it for a gain, that said gain is taxable.

Ed, I agree with those who have responded so far about no capital gains as long as the trust is a revocable trust. If the trust is irrevocable the gain may or may not be taxable, depending on how the trust is drafted. Make sure you discuss this with your tax pro and/or attorney.

Originally posted by Evan Huston:

A single-member LLC is a "disregard entity" to the IRS and treated like a sole-proprietorship.

True enough Evan, unless the owner of that single-member LLC elects to have the LLC taxed as a corporation (either C or S).

Originally posted by Justin Silverio:

Steven - I don't see where it says that you don't need to pay the filing fee for both an LLC and S Corp. Going to look into this as well.

Justin, under MA law your entity will be classified as either a corporation or a Limited Liability Company (LLC). It will NOT be both. It will pay the fees appropriate for its classification.

That being said, both the corporation and the LLC can make an election to be taxed as an S-Corporation. This election is strictly for tax purposes at both the federal and state level.

The decision regarding S-election should be based on your investing strategy. If you are a "buy and hold" investor, an S-election would probably be a horrible idea. You should review your investment strategy and tax situation with your tax pro. He (or she) would be in the best position to advise you since an S-election is based on tax, and not legal, issues.

Originally posted by Steven Hamilton II:

And finally NO you're golden retriever is not your dependent for tax purposes.

My chocolate lab would probably agree with you - about the golden retriever, that is.. :-)

Originally posted by Shanequa J.:

Originally posted by Curt Davis:

The problem here is your trying to guess what should happen when you should listen to what the closing attorney says needs to happen.

If I would've asked a lawyer, then why would I have logged onto BiggerPockets? I thought the whole point of this forum was to ask real estate questions.

Shanequa, I read Curt's response as pointing out to you that you need to find out from the closing attorney how he/she wants to handle the situation of your sellers living in different locations. While we here on BP can tell you what our experience has been only the closing agent can give you a definitive answer as to what he/she will accept for your closing.

The point of the forum is to ask real estate questions, which you did. It just sounds like you didn't like the answer you received.