All Forum Posts by: Jeff Sheraton

The math side of this question is pretty straight forward. If you are strictly looking for return on your investment you simply need to compare your projected ROI for your investment with your mortgage interest rate. I'd venture to guess (hopefully) that rental returns would crush your mortgage.

The question can get a little more difficult when you take into consideration your personal situation/goals. For example are you getting ready to retire?  Do you need to supplement active income with more passive income?  Keep in mind that just because many people want a big portfolio doesn't mean everyone wants or needs one.

I would suggest coming up with your goals and making a decision based on what needs to be done to achieve those goals. 

I would think that if you can get a HELOC and avoid paying hard money rates that would be the way to go.

There is no reason to have an s-corp for rentals. The money you earn from rentals is passive income (no self employment tax). If you start an s-corp you will be required to pay yourself a "reasonable" wage that would be subject to the self employment tax. It would be better to run everything through a master LLC. In Delaware you can also create a series LLC if you wish.

*Certainly verify this with a CPA as I am not a tax professional.

I would suggest partnering with someone you can trust, preferably with experience investing in whatever area you want to get into. No sense paying for mistakes that someone else has already paid for.

What sort of investing are you planning on doing?  Buy and hold, flips, ect.

Hello, there is a Greater Wilmington Housing Providers (GWHP) group that meets at Iorn Hill on the Wilmnington Riverfront.  3rd Wed of every month at 11:30 for lunch.  Cost of the meeting is $20, free for the first meeting I believe.  

I am a member of both this and the group in Newark (DELRIEA).  This group is certainly focused toward landlords.  Lots of good information and lots of good speakers.

Let me know if you need more info.

What is your goal?  Are you trying to replace your income with passive income?  Make some side money?  

Let your goals determine your path.  

As for the DBA question. If you are trying to build a brand with your business it might not be a bad idea to set up each LLC to do business as your brand name if you don't have a management company that oversees each LLC. For example ABC, LLC and DEF, LLC both do business as Alvey Properties or ABC, LLC and DEF, LLC managed by Alvey Properties, LLC or inc.

A series LLC is a newer type of LLC. It allows you to create multiple series(s) within an LLC. Each series gets treated like its own company. Each series can sue, be sued, go into debt, ect. The benefit is that you only need to file one tax return and pay one franchise fee. They are fairly new, the downside is that they have not been heavily court tested.

Lots of people get stuck where you are. They get overwhelmed by the technicalities of different entities. The best thing you can do is spend a couple hundred dollars and talk to an attorney. Bring your list of questions and walk out with a definitive answer. Chances are you for tax and legal reasons you are going to be looking at an LLC if you are doing buy and hold. You can google LLC's vs s-corps vs general/limited partnerships to learn the basics.