All Forum Posts by: Ashley C.

Welcome Steven and hi everyone. Talk about a timely post! I'm looking for good qualifying questions for CPA interviews. Would ya'll mind sharing what would make you comfortable saying a family member could trust their business to a particular CPA?

So far this post has suggested:

What was the most recent CE course you took and when?
What subject is/are your academic degree(s) in?
What is your specialty (tax accounting, tax representation, etc.)
How long have you been practicing?
How many clients do you have?
What percentage of your practice today is in real estate?
Have you represented clients in front of the IRA, and what is your success rate?
Will you share a reference(s) from your current client who runs a business similar to mine?
Will you share a reference who can speak to your representation before the IRA?
How can you or your professional network help me with entity structuring, retirement/estate planning, business analysis, etc.?

Hi everyone and thanks in advance. Please advise you best to protect my private lenders in case I die or become incapacitated and can't run my business? One post suggested adding the PL to my personal life insurance and adding an operating agreement clause stipulating the PL gets paid from life insurance proceeds. Sounds simpler than figuring out how to posthumously finish a rehab, sell the house, and pay off the lender.

That leads into what mechanisms should I put into place to wind down in-progress deals, but that's probably a topic for another post! (rescinding offers, finishing in-progress rehabs, finalizing selling rehabbed properties)
:mrgreen:

anyone?

Mitch, the class was several months ago and - typical - I can't my notes. It was a commercial investing class, and we'd been talking both short value plays of roughly a year as well as longer holds. His talk was geared toward tax reduction strategies for higher net worth investors, combining tax strategies with asset protection and estate planning. Wish I had more details - the room was on fire when he was talking. Oh well. Will post again if I find the notes.

Hi and thanks J Scott. I'm just gearing up for my first investment. My plan is SFH rehabs for short-term cash to build up funds to use in buying apartments. If I'm understanding right, tax-free dividends could be a big portion of those funds. I figure I'll take out enough salary each month to cover my actual expenses.

Some of the strategies I've been reading on the board are mucho cool, but too complicated for my little needs right now. If I can get the basic entity and operating agreements, insurance, and a will in place, I should be good to go. Much appreciate the feedback!

I recently attended a bootcamp where one of the speakers was a tax guy. He was apoplectic when he talked about CPAs who set up clients in LLCs with an S-corp tax election in part to save on self-employment taxes. Swear to Jesus, thought he'd stroke out right on stage.
:protest:

His take was that this S-corp election requires Schedules C and SE, putting a red AUDIT ME sign on your back and exposing investors to a high risk of audit (more highly audited than any other type of return). He advised using a multi-member LLC taxed as a partnership, and using other tax strategies to make back the 15% or so you've lost in self-employment taxes. In other words, the high risk of a painful audit outweighs the benefit of self-employment tax savings.

It's not a critical issue for me at this point, but now I'm curious. I brought it up to my CPA, and now she wants to take this guy on and go 15 rounds.
:pissed:

Any thoughts?

First, thanks for the wealth of information on this site, especially folks who've taken the time to ferret out and post related links in their posts. After scouring the forums, I've come up with a list of the insurance coverage I think I need for a vacant rehab shopped out to contractors. Would ya'll take a look and let me know where I'm off base? Got a few questions, too. :D Thanks in advance for your help!

1. Liability insurance to cover claims or lawsuits resulting from bodily injury/property damage to others caused by an accident on my property

2. Vacant building coverage (replacement cost) to cover damage to building, replacement of property, rehab costs, debris removal, theft of newly installed fixtures/appliances

3. Get added as additional insured on my GC/Subs policies

4. Hire GC/subs with liability, work comp, commercial auto policies; should include coverage for "projects and completed operations" to cover my cost to bring the property to completion if faulty workmanship, defective materials, carelessness, or accident occurs; covers defects after property is sold; should also cover theft of materials/tools so I'm not out the cost of a stolen pile of 2 x 4s (they buy everything).

Questions:
Is "Hazard" insurance for fire, wind damage, vandalism, etc. covered in vacant building coverage?

Am I liable for criminal acts committed on my vacant property (dog fighting, prostitution, drug deals, parties where someone's injured, etc.?)

To which contractors policy(s) do I get added as additional insured?

Can a contractor's injured employee, covered by w/c, also come after my liability insurance?

Are there any clauses you've found especially helpful or to be avoided at all costs?

Is the contractors coverage taking the place of what would be builders risk if I were doing it DIY?

Anything else to consider when there's a private lender mortgage in place?

Does it matter if my contractors are bonded?

Newbie here looking for help adapting generic paperwork and processes to the (litigious!) California foreclosure market.
:shock:

What are the major issues affecting my contracts/paperwork? How do I approach discussing deficiency judgements? Can I use a limited power of attorney? Does the warranty deed need to be notarized in-home at the first meeting, or can I instruct the buyer to have it notarized at their bank and mail it to me (to document their willingness to sell)? Anything I need to document re: right to recission?

That's all I can think of for now. Thanks for your help.