All Forum Posts by: Greg Scott

I don't know anyone in real estate that has elected S-corp over Partnership.  There may be some specific use cases where an s-corp is better.  In most real estate cases you simply have forced yourself to pay more taxes by choosing s-corp.

I don't pay myself a salary.  I regularly take distributions.

Your expectations regarding grout may not be reasonable.  The chip on the cabinet is a slightly different issue.

It would be unusual to fix the cabinet now and take it out of the security deposit as you are just reducing your protection.  If you do have the cabinet repaired, just add it to their next month's bill.  I would, of course, communicate this to the resident.

As far as the grout, I don't think I've ever had a resident that "maintained the grout". If it is just a mildew issue, ask them to go buy some Tilex or other mildew cleaner as that will likely clear up the problem.  If they don't clean it by your next inspection, then give them a lease violation notice. If you are asking them to manually clean the grout with a grout brush and then apply a sealer, that is not realistic.

The LLC operating agreement will determine whether you can sell shares and how you go about that. Even if you can sell, since it is a non-liquid asset with no ready market, selling could be a challenge.

You are probably lucky that DCHA is so difficult to work with.  They will also be hard for your resident to reach too. 

Given that its been over 4 years, and now this is coming to light, I have a feeling your resident had a discussion with someone who gave them this idea.  Whether it is a friend or a lawyer from free legal-aid, you don't know.

Based on your numbers, I calculate your potential liability here at about $10K, assuming there are no penalties from having potentially broken the law.  If there are penalties, they could easily double or triple your potential risk.  Isn't it worth a few hundred bucks to get the opinion of an attorney experienced with this program to make sure you are correct?  

If you find you are on solid legal ground, then just proceed with a lease violation notice for late payment.  If you find you are not on solid legal ground, you have the ability to correct this before things potentially get worse.

The answer must be, "it depends".

Do you own these 75 doors 100% yourself?  How strongly are they leveraged?  What are your financial objectives? How much pride to you take in making them great places to live?  All of those questions and more will determine how hard you are working and what you are doing.

My wife and I manage 830 doors with over 200 investors.  Our goal is to deliver great profits for them (and ourselves) and provide a great place for residents to live.  We spend more time on our business than we did when we were working W2 jobs.  

One of the things we like about the business is that no two days are the same.  There are constantly new opportunities to be leveraged and new problems to be solved.  It keeps us very busy.

Tough love. I'm not a fan of your strategy.   Take some money out and do it right.

BTW, please don't focus on a $50K house.  You will probably have bought in the worst part of town and your experience will be a nightmare.

What is your aversion to selling off some of the VTSAX and using it to invest in real estate? That is the easiest and simplest way to get going.  If you are willing to buy out of state, you should only need to liquidate a small portion.

I'm not afraid of debt, and have tons of mortgage debt.  Taking out a margin loan on a brokerage account is not what I would consider to be prudent debt, because in a down market, the brokerage can force you to liquidate at the worst possible time.

That is the law in several states, including Florida. The only long-term work-around is to take the property out of the LLC and put it in your name.

https://www.avvo.com/legal-answers/llc-and-eviction-in-flori...

If you already have a relationship with a large group of investors, raising money through a 506(b) could be very easy.  If you don't, you may need to use a 506(c).

Raising money these days for a syndication is much harder than it was 3-4 years ago.  I'm still seeing $10M+ raises close within 48 hours, but only for those with great track records.  I've seen a lot of other deals languish for weeks, some dying for lack of interest. 

I had 14 SF rentals at one point.  My personal decision was to leave the mortgage and deed in my  (or my wife's) name and have strong liability coverage.  We also added a $2M umbrella. That gives you access to conventional loans.

At one point we formed an LLC but just used it as the manager for the properties.