All Forum Posts by: Jack Lee

Lately, because of the large amount of confusing and low quality information I have read online and my inability to access my book collections, I am confused about taxes.

I have the following questions:

1. Are there any significant differences between a LLC taxed as a proprietor vs a LLC taxed as a S-corp? Both are flow through but I have heard a lot of conflicting information about which is better for real estate.

2. Taxation rates? So let us assume that we maximized our deductions and still end up with an annual net rental income of $1000. Do we pay a self employment tax on this? No right? We pay federal and state at the personal bracket level?

3. In addition, would a growing portfolio of rentals trigger the wrath of the Alternative Minimum Tax?

Thanks

So recently I've been concerned with the Due on Sale clause. The logical thing for lenders to do is not enforce it when interest rates are low and stringently do so when interests are high. This forces the homeowner to refinance at high interest rates.

I was wondering how subject to sales are structured and if they can avoid this Due on Sale trigger. What happens to the title? Can the lender see?

Thanks,

So I should just entice the seller into the agreement and let them deal with the consequences should there be an issue?

This sounds rather entrepreneurial. I like it.

Ned, that is so simply brilliant. Lol I was trying to formulate strategies trying to explain seller financing to the seller.

What about if the owner still has a mortgage? How do you guys structure the deal?

Hey guys,

How do you go about getting seller financing? Do you just ask the seller if they are familiar to the topic and then give them more information?

In addition, what if the seller uses an agent? Do you just pass the word to the agent?

Thanks

I see. It will be a single family rental or condo rental.

I will do the diligence to see what the expected replacement costs are and the useful life remaining.

So I should budget around 10%?

What about security deposits? It is my understanding that things like roofs, furnaces, and driveways are expenditures I have to pay. Shouldn't the tenant be paying for any damages that result from their actions?

Hey guys,

I've recently seen a few very nice Coop units that sell for reasonable prices and have tremendous rental potential. Financially, this deal is as solid as it comes. Unfortunately, I am very worried about the Coop.

Does anyone have experience dealing with Coops? It is my understanding that most of them have rigorous ownership standards and require minimum income and credit checks to buy? What about the tenants? Can the owner even rent it out?

The other issue is the Coop maintenance fee. I've seen ridiculous numbers such as $1.5/sqft -not sure if per month or per year..... Can someone give like a ballpark percentage for the maintenance fee?

Thanks

Thank you guys so much for the replies. I'm gonna like put all of this in a word document lol.

Michael Woodward Haha well I am still learning and lack real teeth and claws. What happens after an all cash offer is accepted? Do you usually try to get the cash out through a refinance? I hear this sort of financing is difficult nowadays?

Michael Borger I will definitely talk to some escrow officers.

Do you guys use bird dogs?

Hey guys,

I was wondering what the typical maintenance cost as a proportion of rent is.

Theoretically, if we do segregation analysis to see what the rate non building equipment depreciation is, that is our maintenance. Is that assumption correct?