All Forum Posts by: Coleman Nelson

Our LLC uses Joe Beyke.

 Yes, we will be splitting profits evenly between us each month as distributions, except for a portion that will stay in the company. This part doesn't vest over 3 years like the equity portion.

I am partnering up with a couple guys who have a successful rental real estate business. I will become a member of their LLC in exchange for the work that I will be performing managing all of the rental properties. I will not be contributing any money to the LLC in exchange for the equity. I recently found out that I will likely owe tax on the FMV of the equity that I receive in the company.

The plan is that I will get 33% equity, vesting over 3 years.  So the beginning of year 1 I get 11%, then 11% in year 2, and 11% in year 3.  If I understand correctly, I will have to pay tax on the 11% equity in year 1, then 11% in year 2, and 11% in year 3.  Alternatively, I can pay tax on the 33% in year 1 if I file election  83(b).  I guess doing this is good if I expect the equity to increase over the next 3 years so I'll be paying on today's equity instead of the increased equity in year 2 and year 3.

Has anyone had any experience with this?  Any insights or advice that you can share?  That's going to be a big tax bill, especially if I pay tax on all 33% up front.  But if the business grows substantially in the next 3 years, it could be worth it to pay it up-front.  Also, if you know of any alternatives, please let me know.  Thanks in advance for all of your help.

Hey Erik, welcome to the site. I grew up and live in NKY but am now managing properties in and around Mt. Healthy. I'm slowly learning the different neighborhoods in the area...but I've got a long way to go! Best of luck to you and your future investing.

Hey @Travis Farmer, welcome to BP.  Back in my college days I delivered ice for Home City Ice, and made a lot of stops at the IGA there in metropolis of Dillsboro.  There are a lot of great investors and resources in the tri-state area here.  I don't know any that work in Indiana though.

Best of luck to you with your mentor and hopefully you are able to learn a lot from them.  I'm partnering up with a couple young, but experienced investors, and am learning a ton along the way.  The best way to learn is by taking action and helping others.

Welcome to the site Taylor. That sounds like a great slow and steady long-term wealth strategy. Best of luck to you.

Welcome to the site Derek. There's a very good group of investors in this area that are active on here and doing really good work. I'm also doing corporate finance/accounting full time and real estate on the side. I look forward to meeting you sometime. 

Stephen, it looks like there aren't very many good property managers in our area...at least that are on BP or are used by people on BP.

I'm in the process of partnering up with a couple guys here who have 20 units to take over the property management duties. They were looking for a PM, but weren't able to find one they liked enough, so they decided to bring me on as a partner. 

I've thought about starting my own PM company, but I work full time and am not licensed yet, so I don't know if I have the time, and can't do it for others until I'm licensed. But maybe in a couple years I can help you if I get something going. Unless you want to start one!

There are two really good banks that my partners are using for their buy and holds and flips.  Check out Valley Central Bank and Spring Valley Bank.  I believe they are both portfolio lenders and are very easy to work with and offer reasonable rates.

Check out Spring Valley Bank and Valley Central Bank.  My partners use them for flips (Spring Valley) and cash out refis (Valley Central).  Very easy to work with and very fast to close.