All Forum Posts by: David Gotsill

Hey @Zachery Hitchcox.  We used to have a monthly BP meetup (Brew Dog in Roppongi, 3rd Thursday of the month), but with the pandemic (and I moved to the US for a bit) I am not sure of the status atm.

Still, I'd be happy to meet up for coffee or whatever, and can reach out to the 1-2 other I know from these forums who are still in Tokyo (sadly, many have moved away) and interested in real estate. 

@Zachery Hitchcox & @James Thomas:

Although there's a small group of us here on BP who are based in Japan, I do not recall seeing this topic before. 

I rely on the services of a husband/wife CPA team based in SoCal, with many clients that have Japan connections.  I don't know that they have a specific real estate focus, but from my experience they are good with the foreign-earned income or foreign tax credit stuff (as should be most CPAs?).  I would be happy to send an introduction email, if you are interested.  I use them for 1040 prep, but that's it.

Separately,  I have a Japanese CPA who helps with my J-taxes.  Depending on your Japanese level, the most important thing for this may be finding one who speaks English (I communicate with my guy in Japanese).  

Hey @Daiki Kataya - I am also based in Japan and invest here and in the US.  Happy set up a time to chat.  Send me a message and let's try to connect.

@Timur Abdullin - Sorry, I don't have any specific recs for Pittsburgh, or PA in general.  If you're trying to close this week after consultation with an attorney, you definitely need to reach out soon as they may need some time to consider the situation.

Based on a quick search, I did not see any governmental agencies addressing this particular question.

LA county assessor says the child must make the received property his/her primary residence within 1 year, and must file a valid Home Owners property tax exemption.  Presumably, you can only get this exemption for 1 property at a time.

https://assessor.lacounty.gov/...

@Heidi Brown - The quick answer is that it all depends.  With owner financing, you might look at it and think great - I am fairly free to structure as I like, without a "pesky" bank underwriting the various risks.  On the other hand, you won't have a bank underwriting risks, so you'll want to consider them yourself.  

You seem to be focused on the commercial terms: who puts in how much money, to get what percentage, etc.  You also need to think about some of the more legal implications, some of the most important (in my opinion) of which are: (a) liability - who has what liability if something goes wrong?; (b) control & management - who has control, who makes decisions, what decisions are majority, what decisions are unanimous, what happens if there is a deadlock on a decision, etc.; (c) exits - can a partner exit the deal whenever they like? can they sell their share to someone else? etc.; and (d) additional contributions - what if the deal needs money for something (deadbeat tenant causes damage not covered by insurance), who (if anyone) has to come out of pocket?  If one partner comes out of pocket but the other doesn't, does that change the relative share?  

These can be as simple or complicated as you like.  One of the simplest ways is definitely a personal loan with interest.  For example, I've recently been involved in deals with interest paid at as low as 6%, and high as 12%, depending on how much the money was really needed.  Here, sounds like you need the funds, so a solid rate in that range may do the trick?  A portion of the income is a bit more complicated.  Is that gross income?  Net?  If net, then who decides what repairs or improvements are made?  (Consider this:  if you offer the person 50% of all net income, but you get to decide when/what to fix or improve, then you can essentially use all rental income to improve the property, giving nothing to the lender in the interim.)  Would it also be 50% of proceeds on sale?  Is this before or after cap gains?

I find it very helpful to make a list of various scenarios, and consider what outcome you think is fair in each scenario.  

Hey @Greg Cook - That would probably depend on what you're doing in your real estate.   If you're targeting single family homes as buy-and-hold investments, then you probably do not need an attorney licensed in each state when you make acquisitions (couldn't hurt, though).  If you're doing something more, then it might make sense.  

A common approach would be to have one "go-to" guy or gal, who would be licensed in your main jurisdiction.  Then if you need something specific in another jurisdiction, that guy/gal would liaise with local counsel in the second jurisdiction.  For example, Colorado Attorney would reach out to Texas Attorney (when you buy in Texas) and say something like "can you just check this from a Texas law perspective?"  That way, Texas Attorney just looks at a narrow scope, and theoretically doesn't duplicate the work Colorado Attorney is doing for you.

This approach is used by investing companies large and small.  

@Michael Plaks - As always, so informative and well explained. Thank you.  

I believe you and the tenant are free to contract about this matter however you see fit.  It would not be uncommon for building-related pass-through expenses to be on a building by building bases (so excluding the building in disrepair), but for property-wide expenses to include all leasable (if the second building is not leasable, this is gray, so agree with tenant as you see fit).  Are any of the property taxes levied on the structures?  Or only on the land?  

I agree with @Kevin Romines that you might check with a local title company to learn about common practice.  Based on what you describe, there's nothing that should prevent you from using a general warrant deed.  But at the same time, I am not sure what you gain by doing so.  

Generally, buyers want, and lenders and insurers require, a warranty deed. In a warranty deed, the grantor is making various promises about title to the property. Often for internal (like you to your LLC or within close family members), a quitclaim is used. In a quitclaim deed, no such promises are made. But in doing so, title issues can arise in the future - such as the new owner's ability to sell or refinance. In these cases, you often see the LLC quitclaim back to the individual, and the sale/refinance happen that way.