All Forum Posts by: Jimmy H.

Vikram, good point. My point was that you can get such international ETF's that have a current dividend yield around 5% which is nice. Having exposure to other markets and the growth that these developing countries is experiencing is just a plus for me. It seems to be a safer play to me that gives good diversified international exposure with a decent yield. Of course these ETF's also own utlities such as Iberdrola and e.on, so they provide good diversity and exposure to more developed nations outside US as well.

I've read that blog piece before and it was great. Reading that, plus Rich's OP in this thread is what led me to ask what other favorite tax "tricks" you and others have up your sleeve.

My question about taxes is, besides what is in your blog, and well known basic RE deductions available, what are some of the best ways to save on taxes that you know of. Vikram made a recent thread on this but it hasn't generated as many quality responses as he'd probably like. I hate being on this thread and people say "consult a professional CPA or lawyer". That is undoubtedly good advice and needed sometimes, but I want to hear those well rounded responses voiced here in this thread from the experience of others., not spend my money on advice when it isn't needed (isn't that sort of the point of this forum?)

In reference to my comment about US being better off than other countries. For one, we are better off than most developed nations, which is whom we should be compared to.

Developing countries are seeing growth and not directly affected by the "global meltdown" the way developed countries are, but are indirectly affected as we purchase their manufactured goods and raw commodities. But undoubtedly developing countries have plenty of problems strewn along their path to development. China, India, Africa, and SE Asia are growing as well but have a LONG way to go, and many problems to face along the way. We here in America have problems and challenges but not of the scale that warrants or necessitates full scale financial apocalypse here in America as is so often predicted by MikeOH and others. Point being, I don't see MikeOh nor anyone else moving their wealth to Brasil or Venezuela.

In that sense - US is by far the best off as compared to others countries. I plan on building the majority of my wealth through domestic investment here in the US, with some international diversification of course, and I want to know some more of Rich's (and others) favorite tax secrets since that is one of his biggest hindrances to creating wealth.

In the increasingly globalized economy of today, I think investors should be allocating a portion of their investment funds in non-dollar denominated assets.

Buying some international utilities ETF's (relatively safe and dividend paying) and some Canadian dollars in a FOREX account would be a good start.

Rich,

I would t love to hear you ellaborate more on your tax saving strategies. It is something I am very interested in and cant find too much info besides websites that list the traditional RE deductions. What are some of your most effective strategies. And I know your not a lawyer or CPA, I don't care, I want to hear your opinions from your own experience,so you can skip the disclosure.

MikeOH,

You have been harping pretty hard on the end of times type of talk here in America. Do you think it is just America's downfall that is coming or the whole world -it'd be hard for me to name another country in better position than ours. Albeit we have plenty of problems but it is hard for me to believe the American apocalypse is here. Why aren't you selling any of your RE holdings and preparing by doing anything other than stocking up on canned food and ammo.

Good points all around.

On the contrary though if you consider that neighborhoods change over time, perhaps there are inner city opportunities that may become prime RE over next decades. Some of the 1st ring of burbs constructed long before newer rings of burbs where once the upper class areas and have declined into being poor and crime ridden areas. At a certain point there is only so far out you would want to live in the burbs, and I think inner cities are due for revitalization.

Many of these burbs you speak of may start to decline as the movement of urban revival and renewal bring people back to the city center, with less commute time, more culture, etc.

I think some generation Yer's like myself who have grown up in the burbs are tired and bored of the burbs. It has always seemed counter intuitive that inner city RE is really prime land, near CBD, etc. But is underdeveloped, neglected and tends to house "the hood".

Just a few counter points. I do agree with all that you all have said and would appreciate further recommendations for specific areas that provide quality homes under replacement cost that rent @ or above the 2% rule. Just a consideration at playing a contrarian strategy, if everyone is thinking of investing in the sun belt burbs - perhaps inner city Midwest and the potential for gentrification are under appreciated strategies.

I agree that mid west is overpopulated in that sense, but thats the way it is and the way the country developed, and the future population growth is not going to leave these cities empty.

Elisha, legal zoom probably would be very useful in this scenario. have you used legalzoom?

BTW, I have a friend who just got his CPA and he knows no more than I do. when it comes to CPA's, attorney, RE agents or anything else you want to seek out the best and unforetunately the best are typically the most expensive. that is why this forum, full of CPA's, attorney, and experienced investors who have sought advice from such proffesionals should be able to provide solid advice here for BP members and help save everyone some money - one of the purposes of this thread.

Great response Finexaminer, but with a ONE member LLC this all changes. Do I go sit in a board room by myself and discuss these things? What do you do as a single member LLC to maintain the seperate identity of your LLC

If you are a single member LLc and supposed to record the minutes of meetings for big decisions to maintain it as a seperate entity. Do you meet alone by yourself and recor dyour own minutes, make a motion to purchase and second the motion yourself. How do these types of situations work with a single member. I do not want any othe rmembers besides potnetially my wife, is this a good idea (not in terms of marital advice) in terms of maintaing corporate identity and avoiding having your corporate veil pierced.

J Scott,

I would assume then that aging is only effective if you already own some sort of property in the LLC and your are "aging" it by showing steady income for a few years.

Or could I start an LLC now if i am planning on getting into REI in the next few years even if the LLC would be essentially a vacant shell? Is aging effective in this manner?

Here are the basic steps for for forming an LLC as I understand them:

1. Choose a Name and Check It's
Availability

2. File Articles of Organization with
State

3. Prepare and Sign Operating
Agreement

4. Conduct an Organizational
Meeting

5. Prepare Written Documentation of
Ownership Interests in LLC

6. Obtain a New Employer ID No.
(EIN) from the IRS

7. Set Up a Separate Bank Account
for the LLC




How about maintaining your LLC? I can contact my SOS for fees, but what about estimating you taxes quarterly ,etc? and what is "aging an LLC" I saw someone speak of in another post.

Finexaminer - it seems forming your articles of incorporation and operating agreement is what allows for such flexiliblity and is where you elect for certain tax treatment et cetera. Therefore this is one of the most crucial parts of the process.

I am now really concerned more about what you do to maintain your LLC....

I am wanting to form a LLC, I do not feel the need to pay a lawyer with all of the info available on the internet today - but much of it is not reliable and I have not found a definitive resource with this info clearly laid out. I have a pretty good idea of what all is involved but not in enough detail to be fully comfortable.

I want to examine a simple scenario of starting a single member LLC in your home state to buy and hold rental property (1-4, 5+, or commercial, doesn't matter), avoiding all the different situational complexities as much as possible.

I think we need a definitive goto thread that gives step by step instruction, in detail, of how to 1) Form a LLC properly. 2) Properly maintain that LLC on a yearly basis including filing of taxes, fees, etc. All of this should have a focus on creating a seperate entity with no doubt of being viewed as an "alter ego" or having the corporate veil pierced. After step-bystep you can throw in comments such as why it may be better to have at least two members for example (remember we are trying to keep it clean and simple).

With the collective effort of BP members, we should be able to provide a resource that allows our members to form a strong LLC without an attorney. I want this forum to be dedicated to the specifics of doing so. I know enough to detail the basics, but would like to hear detailed reponses from lawyers, CPA's, and experienced invsestors. Please include details such as filings, fees, kits, EIN's, articles of incorporation, etc.