All Forum Posts by: John Martin

Thanks for the confirmation!
My accountant (WHO IS VERY SHARP and has seen these deals many times) said the same thing ....RUN AWAY
Don't give him a penny! He has obviously never done this before, uses the wrong terminology like "General Manager" (should be "Managing Member") and the Q/A is written very poorly, amateurish, way to many variables and everything benefits the Managing Members of the LLC's. It should have a real 70 page prospectus written by a Syndicator before asking for that kind of money. 20 Mil for 1000 properties means 20K per property meaning the will be highly leveraged. The Managing Members will also be liable since they are general partners.

So basically I'm running away !
Thanks

yes it is for bulk investments.
They are a new LLC so I dont know what history there will be
I talked to my accountant and sent him the 5 page Q&A, he has dealt with these deals before and was already very suspicious.... also said the tax breaks sometimes will be passive losses and not do me any good, also that they are asking to raise 20mil with no real prospectus? He is used to looking at 60~70 pages of a real offer. Also that these are usually good deals for a short time for the GM's of the small LLC's but that there are too many hands in the pie for the small investor. I'll let you guys know what he says after reading it

Originally posted by "Wheatie":

You need a new accountant. Putting the property into an LLC won't affect the taxes. Since there are multiple members in your LLC, the LLC will need to file a partnership return. The income (or loss) will be distributed to each of you. Each of you will then put that income/loss on your own tax return.

LLC is a good thing for liability, but is a pass-through entity for taxes.

Jon

So if you are an investor / stockholder in an LLC which is investing in real estate....
Losses of your contribution can be written off but if they start to make money on the investment you will pay taxes regardless on whether or not you recieve any dividends correct? Good for the LLC not so good for the investor ? So in a proposal to me they state the profits can be re-invested (or used to repay the investors, or to reinvest somewhere else at the GM's whim, is it reasonable to assume I could even pay more tax than my initial investment? (trying to avoid being duped!)

Newbie here and suspicious of a "great offer"

Hippoze is the primary LLC formed for the purpose of purchasing, managing and selling real estate.

Smaller feeder LLCs managed by GM's will have their own LLC under the mother ship HBI.
Smaller LLC's run by a GM offer this "opportunity" to friends and family.
Hippoze LLC would be the title owners.
They are "Hoping" to refinance in 1-3 years but an investment period of 10 years is desired, It is up to the discretion of the GM what to do with the returned moneys, 1) reinvest with HBI 2) reinvest with another NON HBI investment 3) return to the individual investors.
Depreciation and profit will be passed down to the LLC and investors through K1s.

This is the small of it, our investment would be around $10K and each LLC will be $50K to 250K, supposedly the GM for our LLC has a substantial investment ready to go. They are looking to raise 10-20million.
Each smaller LLC brings a min of 5 shares valued at a total of $250k (50k each)

I cant find the Hippoze Bulk Investments LLC listed anywhere
not even at http://kepler.ss.ca.gov/ which is supposed to be current as of 2/29/08

The LLC Hippoze is however founded by a local reputable respected Agent.
He will make decisions on which properties to purchase.

Somehow though this just doesn't feel right even if it is friends, I will have my accountant look at it but so far there is no real business plan just a question and answer sheet and a few meetings. Something smell rotten here? like I have no say in the grand scheme, seems like a small pyramid scheme or is this normal course of action in this buis?
Thanks