All Forum Posts by: Drew Oberholtzer

Do I need to recapture depreciation if I am transferring title into an LLC and assuming a new mortgage (commercial loan) under that LLC. I am the sole owner of 3 Single Family Rentals and am transferring the title of each property into an LLC with 4 partners and establishing a new commercial mortgage for all properties under the LLC. As an individual, do I need to recapture depreciation on my taxes based on this transfer?

Thanks.  All this information is great and insightful.

I have 3 Single Family rentals in Philadelphia that I'd like to transfer into an LLC or Trust through a partnership with my brother who will become an equity partner through the LLC or Trust. Currently the mortgages are in my name. I have 75% equity in all of the homes. Since Pennsylvania applies a tax to a transfer of title regardless if there's a sale what is my best option to avoid paying tax to shift ownership and mortgage into an LLC or Trust? Is there any benefit in paying off the mortgages and selling the properties for a $1 to the LLC or Trust and then financing it through the LLC or Trust for leverage?

That's frustrating!  I guess it's the same in Santa Monica.  Good to know.    

Go to the Van Nuys DOB.  The people there are easier.

What neighborhood in LA? Everyone has a different opinion on the status of the market in Los Angeles. I believe there will be a slight correction at some point, but Los Angeles as a city has changed a lot and I think property will continue to rise, some neighborhoods more than others. I'm not sure what a four-plex would offer you in LA. The gains in LA are made through leverage gains not cash flow and the exit strategy is much easier on a SFH than a multifamily building. If you purchase a multifamily in a different market with better cash flow it might be a good idea, but I wouldn't do it in Los Angeles. I'd suggest converting your garage into a guesthouse and rent that out so you have two rentals. You'll automatically add value and increase cash flow.

If you need any help with a garage conversion let me know.  I run a company that focuses specifically on accessory dwelling units.  Otherwise good luck and enjoy the process!

Thanks!  Any method to figure out the premium that you mentioned?

I have an interested party that would like to buy in to my real estate portfolio.  The current valuation is $1 million with a debt service of $300,000.  If he wants a 25% stake in the portfolio what is his buy in amount?