All Forum Posts by: Tim Ivory

If this is a single-member LLC (you are the sole owner), then you will file the information for that LLC on your personal income tax return using Schedule C (Self-employed profit and loss).

To input your Schedule C LLC activity:

• Sign in to your account and click on the orange Take me to my return button (skip this step if you are already in your return)
• Click on Search at the top of the screen
• Input "schedule c" in the search box and hit enter
• The first link available should be Jump to schedule c - click on this link
• TurboTax will walk you through inputting your income, the business information, and expenses

Important: You do not report the draws you take from your self-employed business as separate income on your tax returns, nor do you deduct these amounts on your Schedule C. Your self-employment income for tax purposes will be the profits of the business (which may actually be more or less than the amounts you draw as compensation).

Note: A single-member LLC may make the election to be taxed as a corporation, which would require filing Form 1120 or 1120-S.

Hi, guys! I still need to file taxes for 2018. I also have a new LLC but did not make any money this year. I remember reading that I can simply complete my normal tax form and that will also count toward my single member run LLC. Is this true? Is there another form I need to include?

@Wayne Brooks Interesting, so long as I advertise my interest rights in the contract and not the property itself, I'm good to go?

To be more concrete, when someone says by being a principal in the transaction, you have the right to market and sell the property, or your rights therein, I'm just curious what the definition is exactly for the operative word principal. Looking it up online wasn't helpful with definitions like "being a party to a transaction", etc which doesn't mention ownership, equitable interest, or anything else which can justify how being a principal in the transaction would exempt you from needing a brokers license.

Any light shed on this would put me greatly at ease.

I've been reading that being a principal in a transaction exempts one from needing a brokers license, for instance, when assigning lease options. One would not need a brokers license to do so since one would be a principle. Does being a principle somehow make one an owner, even with the most limited rights? In other words, can the case be made that a principle is an owner?

Contract for deed owners are not on the deed, but still considered owners. They have equitable interest. Does this also make them principals? When I sign a contract with a seller for a lease option, do I also get equitable interest, and that makes me a principal?

About having no liability in the deal might look unfavorable to a commission, I'm forced to agree here but can only hope the entire picture would be looked at. Am I aiding or helping the seller? If it comes down to the nuances of weighing liability and who the contract is more favorable toward, the seller or buyer, then the aforementioned question would likely be the determining factor here. 

I'm going to proceed forward. I don't want to allow fear or worry to hold me back taking these next steps. I'm sure I can probably think of many other concerns. If I make mistakes, I'll learn from them, gaining experience along the way. I think what I need most right now is just to do something.

Alright, just heard back from the state commission, and funnily enough, they quoted the exact articles I posted in my previous thread. 

They did not explicitely say I need or don't need a license, but can maybe see why they would not need to take the liability of answering. Basically, here is the information, draw your own conclusions. Just to be safe, I explained the conclusions I made and asked if they might be wrong. Hopefully, that might get a response if I'm wrong. If not, I think I'm good to go. Happy moment :)

In the addendum I have that assigns my lease option, contains this release of liability. I'm also learning other ways to do this as we speak. Furthermore, my signature is not on the resident agreement. Only the sellers and the tenant buyers are. I'm only assigning my option to buy this property with a lease. I'm not closing and definitely not sub leasing it out. The attorney brought up this concern so I'm already anticipating and preparing for these type of worse case scenarios. It also says in the tenant documents that the TB will be responsible for the eviction fees.

I really like having this type of discussion. I want to make sure I'm prepared.

And if you have no liability this just seems like a scheme to circumvent license laws.. because really all your doing is making a fee brining two parties together. 

At the end of the day, that is exactly what I'm doing, using being a principle in the transaction to avoid license laws because that is the only way to do it. That is what I need to do if I don't have a license, and the law allows this. As long as there is that exemption, I think I should be safe. Now, I can at least quote the exact articles and paragraphs which support this claim. I don't think it's illegal to use being a principle to avoid license laws. I'll probably look that up just to be safe. I am getting a fee but unlike a broker, I am acting as a principle in the transaction, and that really is the heart of the matter. There is nothing else to really consider. The moment I'm a principle, I'm exempt from needing a broker license (from what I understand). An owner does not need a brokers license to sell their house. Someone needs to argue against this to make a case for needing a brokers license for assigning lease options.

This is my understanding, anyone reading, please don't take it as fact. I'm still learning whether this is true, and how these laws actually play out in the real world. I do know people are doing this in every state and some are successful.  I find it hard to believe one to build a successful business breaking the law and/or cheating people. I digress on ethics.

I also want to be prepared for any scenarios. What happens if a broker reports me to the real estate commission because he thinks I'm breaking the law? Any familiar with the process? I think they'll send a cease and desist if they review the case and I loose. They cannot fine me because they only have authority over other licensees, as far as my understanding goes. They might be able to take me to court, I can easily imagine. I don't know. Of course I wouldn't push my luck here. At the first sign of trouble, I'll get a brokers license, and to it happily,

I'm upfront and tell them exactly what I'm doing, how it benefits them and all of the risks involved and ways to minimize the risk/effort, like getting a property manager etc. I'm also working with a local mortgage broker in case some of the tenant buyers have specific questions or are overly concerned with making sure the lease option fee will apply towards a downpayment, and other concerns like this. Furthermore, I have a autoresponder newsletter set up to inform them how to qualify and already have a step by step, itemized process, qualifying TB and closing the deal as a whole, which is actually done at the kitchen table to speak. I already had an attorney look at the contracts and documents I'll be using. (Actually, this meeting is what set up this concern of needing a license to begin with, hence this thread).

I tell the owner, flat out the chances are unlikely they'll buy, but if they do, it's a happy day. Atleast they are solving there main issue of getting someone else to pay there mortgage for them and not have to worry about maintaining the property. 

I've been preparing for a while the backend things to facilitate these deals. The most important part is to actually get good at talking with these people. I anticipate this to be the biggest hurdle and where I will have the most opportunity to learn and grow. I'm prepared to sound like an idiot while first getting started, and will give it 4 months with atleast 2 hours a day. I also have a website set up I can refer interested parties to. This is a key element of the process, where they can learn all they need to about there options and choose the best one, which may or may not be a LO. Like I said, it really is all about marketing, a website and an adaptive autoresponder is the way to go, and this is what took the majority of my time setting up.

There is way too much to go into detail here, but I can refer you to some good reads if you are interested. They would explain way better than I could.

On that note, I'm still waiting to hear directly from the TN real estate commission. My previous email got forwarded to a licensing specialists. If it turns out I need a brokers license, I'll be interested to see where in the books in says this. Your idea of earning commission didn't actually sound so bad, but it might have to weight for awhile. There are pro and cons of a license afterall, and at the moment, I'd err on the side of caution. As soon as I need constant MLS access, it would become to make much more sense.

I don't see anywhere on the TN real estate commission website where it says anything remotely that even though I am a principle in the transaction, I would need a brokers license if I'm a collecting a fee. Instead, it was very easy to find the exemption of not needing a brokers license as long as one is an owner. One does not need to be a broker to buy real estate for oneself or to sell one's own property. 

See below, the law as it's written. If anyone has supporting evidence against this assertion, I'd love to hear it. For instance, anywhere where it says being a principle does not make one an owner, or something along those lines.

It is unlawful for any person, directly or indirectly, to engage in or conduct, to advertise or claim to be engaging in or conducting the business, or acting in the capacity of a real estate broker, affiliate broker, time-share salesperson or acquisition agent, as defined in § 62-13-102, within this state, without first obtaining a license as broker, affiliate broker, time-share salesperson or acquisition agent, as provided in this chapter, unless exempted from obtaining a license under § 62-13-104. No person shall be permitted to hold, at the same time, an active time-share salesperson license and an active acquisition agent license.

62-13-104. Exemptions -- Firm licenses for vacation lodging services.

(a) (1) This chapter does not apply to:

(A) An owner of real estate with respect to property owned or leased by such person;

(B) An attorney-in-fact under a duly executed and recorded power of attorney from the owner or lessor;

(C) The services rendered by an attorney at law in the performance of duties as an attorney at law;

...

@Shiloh Lundahl This is one of those grander ways to make money in real estate I refereed to earlier. After gaining  more experience, I will of course want to leverage credit and private money. It's a matter of personal comfort zone, and maybe a bit of  'philosophy'. Even though putting these deals together with financing is "easier", that doesn't mean I should do it at this point in time. There is risk, pressure and the anxiety that comes with it. It's about quality of life. I want to enjoy and try to have fun building a business model that is scalable and automatable without having loans in my name, so no risk w h a t s o e v e r.  That is the point. Once this business is automated and I've accumulated enough capital for other investments, I'll couple that with OPM.

In short, loans coupled with experience is powerful, but I feel they have the potential to hinder me at this early stage.