All Forum Posts by: Chris K.

@Wayne Greenhalgh

It would probably help folks give recommendation if you gave geographical areas where you intend to invest in. 

Disclaimer: While I’m a licensed attorney, I’m not your attorney. What I wrote above does not create an attorney/client relationship between us. I wrote the above for informational purposes. Do not rely on it for legal advice. Always consult with your attorney before you rely on the above information.

@Derek Bleam

1. Complex setups don't offer much protection for most people. This is especially true if you're actively involved in your rental properties. Many states --- including Pennsylvania --- recognize what is commonly known as "participation theory," which holds owners/officers personally liable for the corporation's torts if they participate in them. For smaller landlords, this erodes protection quickly since they "participate" in virtually all decision making for their LLCs. 

Disclaimer: While I’m a licensed attorney, I’m not your attorney. What I wrote above does not create an attorney/client relationship between us. I wrote the above for informational purposes. Do not rely on it for legal advice. Always consult with your attorney before you rely on the above information.

What do you mean by "register"? Are you asking if the LLC can own the underlying rental property?

Disclaimer: While I’m a licensed attorney, I’m not your attorney. What I wrote above does not create an attorney/client relationship between us. I wrote the above for informational purposes. Do not rely on it for legal advice. Always consult with your attorney before you rely on the above information.

For smaller multifamilies, you might be competing with non-investors. House hacking, for example, is now such a common idea that regular people do it all the time. 

For larger investors, the other advantages of real estate (e.g., tax savings) might be more important than immediate cash flow. Also some investors can wait out decades if they wanted to. I've known institutional investors who have basically purchased city blocks over a decade or two for their next "big" development project. 

Disclaimer: While I’m a licensed attorney, I’m not your attorney. What I wrote above does not create an attorney/client relationship between us. I wrote the above for informational purposes. Do not rely on it for legal advice. Always consult with your attorney before you rely on the above information.

@Diego A.

Just to avoid confusion on this topic, whether you classify something as a partnership has nothing to do with whether you are selling securities. In other words, going with a partnership structure does not necessarily allow you to avoid the SEC. It depends on what the partnership agreement says --- especially on the question of how much control each partner has. 

Disclaimer: While I’m a licensed attorney, I’m not your attorney. What I wrote above does not create an attorney/client relationship between us. I wrote the above for informational purposes. Do not rely on it for legal advice. Always consult with your attorney before you rely on the above information.

1. I would use a PA entity for the PA business. There's no massive advantage but I would say it is generally easier to own property and do business in a state using native entities. Now there are times where using say a foreign entity might make sense. But I don't see any good reason for you to favor NC entity over a PA entity in your scenario. 

2. Not sure what an S-Corp would do for you in the above scenario. Do you expect to make a lot of active income? In any event, I generally would not own land with an S-Corp unless there is a very good reason for it. 

3. You can create a self-directed IRA without an S-Corp. If you can swing it, I would first max out an ERISA 401k plan versus a self-directed IRA. It is arguably one of the most creditor-proof way to own assets.

Disclaimer: While I’m a licensed attorney, I’m not your attorney. What I wrote above does not create an attorney/client relationship between us. I wrote the above for informational purposes. Do not rely on it for legal advice. Always consult with your attorney before you rely on the above information.

@Diego A.

When people say "syndication" in context of real estate, they really mean filing the necessary paperwork with the SEC to sell securities. Most of the time, they are seeking to rely on exemptions Section 506(b) or Section 506(c) to avoid having to register their offering with the SEC. You will need to work with lawyers that specialize in handling those registrations. It's a different skill set from handling the legal work for the underlying real estate transaction. Some lawyers can do both --- some cannot. 

Not sure if @Ronald Rohde still posts here but he is probably a good starting point for any TX transactions. 

Disclaimer: While I’m a licensed attorney, I’m not your attorney. What I wrote above does not create an attorney/client relationship between us. I wrote the above for informational purposes. Do not rely on it for legal advice. Always consult with your attorney before you rely on the above information.

Answer to both questions are "maybe." Unfortunately, no one can actually answer this without looking at the title and the foreclosure proceeding. 

Disclaimer: While I’m a licensed attorney, I’m not your attorney. What I wrote above does not create an attorney/client relationship between us. I wrote the above for informational purposes. Do not rely on it for legal advice. Always consult with your attorney before you rely on the above information.

Predicting supply and demand is a hard task. But at the macro level, mankind is very good at meeting market demands. This is especially true in the United States. 

I would not qualify any of the recent events as fundamentally changing the real estate game. I would categorize it as more as both political parties doing some potentially unwise things in respond to COVID and election cycles. 

Also, one nitpicky point to make is that the United States is nowhere near capacity in terms of land. Take the population density of New York City --- certainly dense but nowhere as many other cities. You could fit the entire population of the world into New York City metropolitan area if we really wanted to try. 

Granted, that might look like dystopia to those who grew up in rural areas in the United States. But we don't have an actual land problem. 

Disclaimer: While I’m a licensed attorney, I’m not your attorney. What I wrote above does not create an attorney/client relationship between us. I wrote the above for informational purposes. Do not rely on it for legal advice. Always consult with your attorney before you rely on the above information.

@David Schiman

I think it mostly depends on your level of expertise in real estate. For example, do you have any experience handling a construction project? There are many benefits to getting into real estate. But in my experience, most of the successful folks end up becoming an expert in some kind of vertical within real estate. Or you have to make some lifestyle changes to take full advantage of it (e.g. real estate professional tax status). 

Assuming you do not want to take those steps, I believe investing in something like VTSAX yields better returns and is "safer." Of course, this assumes a long-term hold. 

Disclaimer: While I’m a licensed attorney, I’m not your attorney. What I wrote above does not create an attorney/client relationship between us. I wrote the above for informational purposes. Do not rely on it for legal advice. Always consult with your attorney before you rely on the above information.