All Forum Posts by: Andrea D.

For liability protection, many times real estate LLC's incorporate in Delaware. That way it goes to the correct business court right away...Judges, not juries, hand down quick and fair decisions based upon their knowledge of business law and reference to preceding cases. Everything is taken care of by people familiar with the laws vs. the common person.

Yes - S-Corp is a great option for realtor income. However, as stated by many others - it is not a good idea to hold real estate in one. It doesn't matter in the short term, but come sale you will have gains and depreciation recapture.  The only time we really would consider it is if you own both a business and the rental, and you pay yourself rent for the building.

To take advantage of this option, you must own both the rental property and the business. You could also use grouping if the rental activity is “insubstantial” (a term undefined by the regulations) in relation to the business activity.

You can offset the income only if you materially participate, and need to be careful of the self-rental rule under the IRS code 469. This could potentially be a lose/lose situation due to passive loss rules, so you want to be sure to talk to your CPA before doing this. 

@Gervon Thompson

I also am looking to househack, I have no debt, a job in public acct and a 820+ credit score; however all lenders I’ve talked to are requiring 15% down on anything multifamily. Even to live in as primary residence, since Freddy/Fanny Regulations have tightened up I’ve been told.

I’ve heard so many people say it’s possible, but I haven’t been able to find it myself....Have you been approved for 3.5%, and how is the lender calculating the other rents in comparison to your dti? Will you message me with their info if you have been approved?

Maybe ny is different than in fl.... I thought the challenge would be getting an accepted offer with a loan that’s highly financed, however I can’t seem to find the right instrument and am not super familiar with the lending industry. I’ve only done conventional 20% down in the past....

@Lindsey Ceane

One thing to think about was this was written before a global pandemic. Things shifted a lot, giving people the ability to move around the globe working remote, wanting nicer homes, supply vs demand going crazy ever since, however - it’s no secret real estate tax laws have favored the wealthy since the beginning of time. The ones educated enough to write the tax laws were the investors.

With that being said, this pandemic has significantly split the rich getting richer and the middle class disappearing. The same month 40 million people filed for unemployment, Bezos gained 48 million in wealth the and became a trillionaire....

Just food for thought as the article is written prior to all the extra currency printed (27% of money printed in circulation was done so I. 2020), and poured back into the stock market and into real estate.

Times have changed and what lies ahead for tomorrow - I can promise I’m curious about!!!

@Erwin F. are you buying SFH or multi-fam? Are you looking on the MLS? Do you have a good realtor you can recommend? Please message me if you don't mind!

@Jennifer Walsh - I grew up in New Berlin but now am living in FL. I have been pricing deals in MKE, tosa, Waukesha and oconomowoc since it’s much more affordable for multifamily than where I’m at, but in my calculations and in my experience owning personal residences in both states, WI real estate taxes are extremely high and always seem to push me into negative cash flow.

I didn’t run any single family homes, but I know when I owned a condo in Madison, my taxes were more than what you pay on a $300k single family home here. In WI people bought home to save on taxes so they can itemize on their tax returns vs paying rent. Here, owning a home I still can’t even itemize on my tax return. So I know that’s a large factor while I’ve been looking in that area.

@Zach Kidd when you say easy loan as primary residence, can you still do this with 5% down? And if so, I was told you can use 70% of rents to your income on the other empty unit(s). Do they calculate that just adding it into the dti?

Hi there fabulous house hackers and others who considered it, but went a different way,

I am trying to decide if I should wait it out in the St Pete area for a duplex /triplex to house hack, however I’m finding it to be incredibly difficult in this market. I have been putting in offers as each comes on the market within a day in areas that aren’t in the slums, and within my budget (needing to stay under $400k).

In the market here, it may not be a realistic goal, as I am having a difficult time securing anything since properties have been scooped up in cash... after 4 months and nothing, my original primary residence has sold, month to month rent in furnished Airbnb’s is adding up as well as the storage unit holding my stuff, and I continue to watch interest rates rise.

To people who have househacked, was it truly worth it that you would wait it out if you were in my shoes? During this time, since many people are moving to Tampa each day, the amount of house you can get even compared to 4 months ago is becoming less and less. To me it doesn’t seem to make sense to wait, but maybe it does and I just haven’t experienced the power of a househack.

What would you do??? Thanks in advance!

@Adriana Vergara

https://podcasts.apple.com/us/podcast/real-estate-strategies-with-ken-mcelroy/id1465180254?i=1000516128451

This is good food for thought ....directly applicable to your spot and financial future.

@Adriana Vergara

Do not steal from your future self with an IRA distribution.

You need to start a hustle. Side hustle, you need to increase your income. If this is getting your own real estate license, it’s only 63 hours (at least here in Florida), you are doing the work for your boyfriend. You now know how. Get 100% of your sales, not just 20%. He may not be happy, but put yourself first.

Go to thrift stores in the best area of town and buy expensive clothes with tags for pennies on the dollar and list them on poshmark or Mercari. Save every one of those dimes and put them directly towards your cards.

Get a bartending job. Or remote cold calls. Stash cash - 100% towards your credit cards.

Although I don’t believe on Dave Ramsey’s policy against debt leverage when it comes to real estate, start listening to some of his podcasts. Start the baby steps. Just to put yourself into the position to start investing in real estate. Til you blast this debt, you don’t have money to put towards real estate. Your interest rates are too high. Returns on real estate investments are awesome, but they are not guaranteed 20% + which you are currently paying on this debt.

@Ilan M Aliphas thank you!! I appreciate your input!