All Forum Posts by: Bill Walston

Larry Goins' How to Be a Real Estate Day Trader is a great read for those interested in wholesaling. It can be found in most book stores as well as online at Amazon.

0 Votes

Corey, a Joint Venture Agreement would cover this situation quite nicely. A JV is for a specified period of time, or for a specific project in contrast to a partnership, which is usually an on-going business. Most of the advantages AND disadvantages of partnerships apply equally to JVs. You should consult a good real estate attorney and have him draw up or review your JV Agreement.

2 Votes

Originally posted by Tom Wallace:

Thanks all. Bill, when you mention a "blanket liability policy" are you referring to something additional to a landlords property insurance policy? I do have property insurance (specifically for landlords) on each property. There is some liability protection in the policies. Are you referring to something in addition to that?

Sure do Tom. It's also called an "umbrella" policy and protects the policyholder above and beyond the standard limits on their primary policies. They typically are sold in increments of a million dollars.

0 Votes

Originally posted by Tom Wallace:

Does it make sense to have both the ownership of the properties I purchase and the "handyman/maintenance" business under the same LLC?

Tom, it doesn't make sense to have both businesses under the same LLC, especially if the properties belong to you, and the other business will be owned by you and your son. More importantly, the two generate different types of income. The rental properties generate passive income, while the management company will generate earned (active) income. For tax purposes, it is usually best not to mix the two.

You do NOT need a separate LLC for each property. Ridiculous. J Scott is spot on. Be more concerned with the amount of equity AT RISK. Note that is equity in the properties, not the value of the properties. A good blanket liability policy will keep you covered.

A good real estate attorney and/or tax professional can best help you make the right decision for your personal circumstances.

3 Votes

Originally posted by Jon Holdman:

That may be true in CO, but not here in TN. A signed real estate contract is a binding contract - for both buyer and seller. Unless there is an "out" clause for the seller he or she is just as bound to complete the deal as the buyer. If the seller chooses not to complete the sale, the buyer can, if he chooses, sue for "specific performance." Here, that lawsuit will usually cloud the title and prevent the transfer of property until settlement. That is not to say that the buyer can't just decide that it's "too much trouble" to attempt to enforce the contract, but he or she would have the right to do so - and a signed contract holds a lot of water in court.

Just my .02 :-)

1 Vote

Originally posted by Ibrahim S:

Does anyone know of a free email tool that will allow me to send email to a large # of recipients? Yahoo isn't allowing me to send an email to my distribution list of 106 RE Investors. TIA!

Try MailChimp - you can have up to 2K users for free.

http://www.mailchimp.com

Hope this helps.

0 Votes

Nice explanation Daniel. Tax rates can be confusing, especially when you consider that we have several methods used to present them: statutory, average, marginal, effective. This explains how someone can be in a 35% "tax bracket" and have a much lower effective tax "rate."

And when someone says "that pushed me into the next tax bracket," they can be absolutely correct. By definition your tax bracket and marginal tax rate are the same.

0 Votes

Nice deal Rusty! I would ask the same question as J Scott. Or is you strategy going to be "buy and hold?"

0 Votes

Originally posted by Daniel:

This does make me wonder if certain circumstances are taxable. This would likely not happen on your primary residence with the $250k/$500k exlcusion but what if we bought a rental house for $50k, it appreciated to $100k in value and was totaled. The insurance company would issue me a check for $100k to rebuild the house. In my mind, I would have a $50,000 gain. It would be similar to selling the property. You're bringing up an interesting thought here....time to research!

Indeed they are. It's called an "involuntary conversion" and your analogy to selling the property is spot on. And the taxes may be avoided using the same tax strategies and techniques that you would would use when selling the property (such as a 1031 exchange).

0 Votes

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