All Forum Posts by: Dilini Sundaram

@Jeff Nash Thanks for your response Jeff. After digging more into the difference between passive and active income this makes sense. I didn't realize you couldn't take a 179 deduction on passive income. I am an RE professional as I am an agent full time. 

I have 10 long term rentals in an LLC, called SP. 50% owned by me, 50% owned by my mother. I manage all 10 rentals. We are buying a truck this year and I would like to do a Section 179 deduction as well as have a home office deduction.

My accountant is recommending I start up a new single member LLC as a management company. The holding company, SP LLC, would then pay my management company a fee every month and I would take deductions from that company. He says this will help alleviate complications since the ownership is split in the current LLC and possible gift tax issues since my mother is the one that brings the capital to the transactions.

Anyone in a similar situation? How do you structure your LLC's and corporations for the RE you own AND manage to ensure you are getting the best tax benefits?

I was thinking of parking some funds in a NNN property that barely breaks even after the mortgage.

Is there a calculation to determine how much Real Estate you need to buy to bring your tax liability to zero? For simplicity's sake, we can just use straight line depreciation. 

I currently have long term, short term, and two commercial properties. 

Interested in doing my first rehab following the BRRR strategy. I have a great relationship with a few banks and one offered to give me a loan at the ARV at the time of purchase. I just give the bank a breakdown of the repairs that will be done, they send out an appraiser to value the home with the updates that will be done.

Example purchase price 300, rehab 50k, new value 450k. Bank gives me a loan for 450k when I purchase the home. 

Are there any disadvantages when structuring financing like this? Any feedback is much appreciated! 

We typically have many showings per rental property resulting in many applicants. Our online application is 55 per signer. In many cases families are fronting over 100 to apply. I can only accept one applicant. I always feel terrible about the cost associated with the formal application, but of course a necessary step in the screening process. I am wondering if anyone does a preliminary application, so that you can ask tenants one by one to apply based on the strongest preliminary application. If so, have you found this method to work? Any advice or tips to solve this problem is appreciated! 

Do you know if there is a deadline the senate has to vote by? 

Thoughts on the capital gains tax being backdated to April 2021? Do you think it will happen? Does anyone know when the senate will be voting on this? This increase from 20 to 39 percent will change the course of so many of my transactions (some not real estate related). Any insight/opinions appreciated!! 

@Brendan Miller Makes sense! Yes, I am trying to put all other factors (amount of work, amount of time) aside, and solely focus on the yearly ROI (so taking out appreciation as well) . Can then find others to do what is needed in the day to day. Thank you for the response!!

Regardless of any other aspects (I know difficult to do). Solely looking at Cash on Cash return. What real estate method would you say has the highest YEARLY ROI? My research tells me short term vacation and/or flipping houses has the highest. To help answer the question: If you had 1 million dollars, and you provided the only income for the household how would you invest that money in real estate in order to provide the most profitable yearly net income? (Aka you take appreciation out of the equation, would just be a bonus since we are looking at net yearly income)