All Forum Posts by: Alex Potec

Thanks guys for the valuable input. I think it’s like car alarm: none is 100% proof, but still to have one is much better protection then none.
I'd like to add another angle to this question. Same folks, who said you did not need LLC, suggested having proper insurance instead. I checked Internet and noticed many banks offer Rental Property Insurance packages that typically include:
Dwelling coverage
Liability coverage
Building cost upgrade coverage
Did anyone have an experience with these products?

First a quote:

I found this in a tax adviser's blog. This is not a unique opinion. Every often I see people talking of LLC not being a real protection.
Now my question: Have any of you seasoned investors been in a situation when you needed such a protection and having an LLC (or another incorporation form) insulation really helped? If yes, could you share the story?

Thank you, 4rmgt.
The tool I need to use is one between my ears.
Hmm, let me see… Must be my baseball hat. How can I use it to get money? Panhandling!!?
:lol:
Seriously speaking, I see what you talking about. There is a variety of options, and you use whatever works better or whatever you more comfortable with.
Still… If you buy a REO or Short Sale, you can't use Subject to or be Seller financed… Or can you?

There is another question that interested me a lot: how do seasoned investors fund the deals?
I mean, you can keep taking mortgages, but that would dry out pretty soon, after 5 or 6 purchases. Many of the folks here have 30+ properties under the belt and keep buying. How that is possible? I don’t believe they buy “all cash”, no one does that. Seller financing? If you buy properties at bottom price seller financing doesn’t sound viable.
What else?
Alex

Joshua, could you share some of these stories? I would be an important lesson to learn for many.
So far I read only one horror story from the guy who bought a fourplex. The former owner put there two new last-minute tenants who caused lots of troubles. Plus some bad luck: one of the other two long-term tenants died and the other one moved because of hardship. As a result, he had no cash flow at the time when he had to do a rehub.
I learned two things from this story: never allow previous owner to tenant the property and always have enough cash or a good lender to cover emergency costs.

Tim, could you pls tell a little more about this? What are the major challenges of property management? You have tons of experience, I believe, and this should be of importance for many, because investing within one or two hours from your home not always works. I would say, investors go where a good deal is… and if a good deal is 1000 miles away, that’s where you go?

Can you do assignment of a contract? Looks like a good opportunity to gain some wholesale experience for you. I’m sure you know the schema: sign the contract with “and/or assign” clause. Find an investor. Wholesale the deal. Don’t forget to include some escape options into the contract just in case. Good luck! :D

If investing in a city or place you are not familiar with, how would one to tell a good area from a bad one? When you look through a listing, how would you figure one from another quick? Any sources that you use to get information about neighborhood, any red flags? Thank you.

Thank you for the valuable input, Tonnele. I want to ask you about LLC. Can a non-resident form a LLC? For example, I am Canadian; can I form LLC in Washington or another state? If yes, do I need to travel there to do this or it can be done remotely? And last but not least, if I form a LLC, do I need to become a personal tax entity with I.R.S?
Would taxing of LLC formed by non-resident be different from the local ones? Thanks.

What taxes do you pay when you sell a property, when you rent a property, and how much?
I was looking the answer to this questions and came across the book called “The 1031 Reinvestment Plan: A Complete Guide to Tax-Free Real Estate Sales" by Fred Crane.
Seem to be a good guide when you planning to purchase or selling a RE.
My question is: which book (or other source) do you Folks use in your tax planning, both to sell and to rent properties. I am especially interested in non-resident rules. Thank you.