All Forum Posts by: Melissa Nash

Why form an LLC in CA?? no reason- save your $$$. Open an LLC directly in OH you are NOT doing business in CA. however the income from that property will flow to your income taxes come tax time no matter what. Doesn't matter if its in an LLC or not. An LLC has nothing to do with taxes. Its for asset protection only. So the LLC location doesn't matter.

Most investors open LLC's in Wyoming and then file foreign entities in OH.

yes, I have done this with a partner. My CPA will ask me each year how much of the tax deductions go to you and to the other owner. Some years I take 100% because I need it more. And some years my business partner takes more. 
The ownership of the LLC doesn't matter when it comes tax time for the tax deductions-- you break it apart each year how you want it. (at least this is how my CPA does it and explained it to me, so if your CPA says differently.......)

Partnerships get tricky.... I would advise to keep simple: the owner that has the loan gets the full deduction each year. And round robin the purchase each time so you each have a title in your name and each have a loan in your name. Keeps it more simple. 

But you can go for any creativity you want. Just make sure to track it all with your CPA and they understand what you are doing and can make sure its done how you want it. It can be confusing come tax time when you have 10 properties and tracking it all. 

You are talking about 2 different things here:

1. The actual (deed)

2. The loan to your lender/bank

You can do what ever you want with the deed-- its your property (deed) and you can move it anywhere to anyone. An LLC is a passthrough that is in your name. So there is no reason you can't put the deed in an LLC. As long as you are paying your Loan the lender can't do anything about it because they are the lender on the note.

They don't need to know, no reason to tell them. Now if you are wanting to put the loan in your LLC that will require a refi or re-casting of the loan. No reason to do that if you are locked into a good rate- just wait and do it if/when rates drop.

*You still get the same tax benefits whether it is in an LLC or not.

*asset protection isn't guaranteed in an LLC either. Its just another step of protecting from curious eyes and separation as a business.

(This is all opinion and not tax advise). 

Proof of funds? List of experience and personal and business referrals?? 

Lots of great info and advice in this forum. Welcome... you will find A LOT here and it can be overwhelming because there are so many great options & strategies. I would recommend to find the strategy that you can relate to most and then focus there. Otherwise you will be pulled and swayed and start getting into analysis paralysis! LOL--- been there done that. I have done it all.... wholesaling, Flipping, buy and hold, short term rentals and turnkey. I won some and lost some and came out of it knowing more about that I like and don't like. Personally I like anything passive :) Best of luck! 

It sounds like you are already successful in that property- so my answer is: 

Never. The first rule of real estate is to never sell a cash flowing income producing property unless you can 1031 exchange into more and higher producing properties. :) 

Almost every single client that I work with says these two things: "I wish I started sooner", and "I wish I never sold my property (blank) years ago". 

What is your end goal and strategy? Financial freedom? Generational wealth? And what is your timeline? The good thing is its just math and planning. Easy right?

Best of luck out there and continued success. 

 Amazing! that that information and use it in your sales & marketing strategy to attract that guest! I have had a lot of success with it. 

I think you are thinking too small. There is more to real estate than just cashflow or the cash on cash return. You are missing out on a lot of wealth just thinking of it as a 5.5%.

Here is what you are missing:

Tax benefits- that is depreciation + Interest payments

Equity growth- national average is 4-5% (some markets much higher, some might be lower). 

Hedging inflation- loans taken out locked in at 30 years- inflation is 7%+

And then the tenant is buying you a house at the end of the day- each month they are paying your mortgage off. 

So you are really talking about Real Estate earning (without knowing the property details) 30-40% return just year 1. (This is based on proforma's that hit my desk daily).

So you are giving up a big return. Also if you took that $340k profit and leveraged it, you are talking about buying A LOT of houses and using 20% down- you are missing out on A LOT of wealth. 

Example:

SFH in Kansas City- renovated and ready for tenant

$182,500 Purchase

+$1645 Rents year 1 (+ add 3% each year)

+$259 cashflow after ALL fixed expenses year 1 (7.4% )

+$258 Principal reduction each MONTH

+$1065 Appreciation each MONTH

+$111 tax savings each MONTH

Total $1692 = 38% ROI year 1

If you look at year 5.... you have $118k in equity and 204% ROI. 

**this doesn't even include inflation at 7% +

That is the power of real estate. Times that by 10 SFH houses.... that could be a almost $2 mil portfolio year 1.... imagine that growth by year 5.... $3mil.

So what do you want 5.5% return or 38% return + generational wealth? 

 You should see my email in the signature below? You can click that and send me a quick email

Hi, jumping in even though this is a few months old. My CPA gave me the 2 steps and the details to qualify. Happy to forward to you, its in a PDF. feel free to message me