All Forum Posts by: Dan Shelhamer

I am about to get 2 LLC's started and am going back and forth on which one I would like to do. One LLC will be for my properties, the other will be for properties that are owned by myself & my parents as a partnership. Looking for advice from investors who have done either a Series LLC or a regular LLC.

• Pros/Cons
• Expenses/Costs

Thanks!

Gotta love it when the prospective "Section 8" tenant comes to view your property, and the car they pull up in costs more than my house!

@Shaun Weekes thanks for breaking that down for me!  As @Luka Milicevic wrote on here "

"Even if you don't claim it on your return, the IRS assumes you do and will take it into consideration when you go to sell and it will impact your cost basis. Not taking depreciation is the equivalent of setting money on fire."  I'm a little confused as to what to do here then.  I obviously want to keep buying as quickly as I can, and don't want any roadblocks when it comes to qualifying for loans.

@Natalie Kolodij thanks for explaining that for me!  That does sound like what he was trying to explain to me.  Basically, that I can only take the passive losses against my passive income, and not my regular income.

@Steven Hamilton II thanks for reaching out, we will have to get together and talk soon!

@Carole G. I also use Quikbooks for another business I have.  Maybe I don't have the same level as yours, because I was unaware that you could keep track of receipts on it.  I am looking for an app where I can take pictures of receipts and it adds up all the of the expenses for me.

@Brett Sorenson @Bryan O. I totally understand your points here.  I am new to this as well.  Only 27 years old, and it may have been a misunderstanding on my part.  I'd like to give him the benefit of the doubt since he has been doing this for 30+ years and have a very successful business.  I used him last year and everything went great.  This year is the 1st year filing with properties & a business so I will see how it goes and then make a decision after this year.

@Luka Milicevic

The one's telling you it won't work are the same one's who have never done it & are too scared to try it.  They're the same ones that will be in the rat race, living paycheck to paycheck the rest of their lives.  Either it'll work, or it won't and you'll learn.  Keep on pushing & educating yourself.  Knowledge is power.  You create your luck!

@Shaun Weekes can you explain this a little more? I don't understand how taking losses based on depreciation would affect my DTI? Thank you.

@Eddie T. Thank you for the info, I will check it out!

@Jay Hinrichs I guess I am considered passive right now, but one day hope to be doing this full time!  Thanks.

@Mark Allen He has been doing this for 30+ years, but sometimes I do question some of the things he says.  He has many clients who are RE investors but he is not one himself.  I think RE investors think differently than people who do not invest.  Just trying to get different perspectives, thanks!

@Account Closed,

That sounds correct. He said that Real Estate investing is considered a passive activity, and passive activities don't allow you to deduct the loss against ordinary income. I have 2 investment properties right now which will be going into an LLC, but currently are not.

The other day I met with my accountant to do some year-end planning, especially since this is my 1st year owning investment properties. A few things that I took away from this meeting are listed below, and I was just looking for some feedback from other’s who have gone through this.

• He mentioned that if your total income is above $160,000 that you will not be able to take the deprecation on the property, but will rather be taken all at once whenever the property is sold. I had never heard this before so I just wanted to hear from everyone if this is a State of Illinois rule or a Federal one.
• He mentioned that after speaking with some other investors, the 1031 exchange would be going away in 1-2 years. Is this true?
• I had asked him if their is any software that makes it easy to track receipts for the different properties instead of having to add everything up manually. He said there are a few, but he didn’t know the names. Any other investors use software of apps like this?

Thanks!

Congrats @Michael Rogers !  Huge inspiration to many!

I currently have 2 rental properties, and they are both going great. My parents now want to be "silent investors" and fund 50% of the down payment on the next one. In addition to also funding the other 50% of the DP, I will be finding the properties, analyzing, screening the tenants, hiring repair workers, etc.

What do you think is a good partnership deal in terms of each of our returns? Also, who takes title to the house?

Can we both be on the loan, and setup a bank account that is separate and with both of our names on it?

Is there any additional paperwork that I would need to fill out, such as joint venture paperwork?

Thanks!

I currently have 2 rental properties, and they are both going great.  My parents now want to be "silent investors" and fund 50% of the down payment on the next one.  I will be finding the properties, analyzing, screening the tenants, hiring repair workers, etc. 

What do you think is a good partnership deal in terms of each of our returns?  Also, who takes title to the house? 

Can we both be on the loan, and setup a bank account that is separate and with both of our names on it? 

Is their any additional paperwork that I would need to fill out, such as joint venture paperwork?

Thanks!