All Forum Posts by: Karl Kauper

Hi All - I am also looking to hire an Ohio CPA and would appreciate it if you could please share your CPA’s contact info with me. Thank you. - Karl Kauper

Hi All -- Wondering if anyone out there has faced a similar situation and, if so, whether you might have any guidance or opinions, etc.? My wife and I are in the process of doing a 1031 exchange purchase. We are in contract to sell a 2-family in Brooklyn that is held in both of our personal names, and we are purchasing a 12-unit MF in Ohio. We have spoken with several 1031 exchange experts (QI's, attorneys, a CPA) and have been told that, to comply with 1031 exchange rules, we must buy the 12-unit in one of three ways: (1) simply buy it in our personal names, (2) buy it via two separate LLCs (one owned by my wife and the other owned by me), or (3) initially buy the property in our personal names and then subsequently transfer the property to a 2-member LLC (owned by the two of us). We cannot (at least initially) buy the property via a single 2-member LLC because the IRS would view the 2-member LLC as a different tax payer than my wife and I (as owners of the property we are selling). I find it a little strange that the IRS would not view a 2-member LLC as the same tax payer but would view two single-member LLCs as the same taxpayer, but this is what we have been told consistently by all of the experts we have consulted. So, we are leaning towards buying the property via two LLCs, although I'm a little concerned that this will make things (like obtaining loans) more complicated for us in the future. I would appreciate hearing any opinions -- what would you do and why? Thanks!! -- Karl

Hi Filipe -- OK, thanks a lot for pointing that out! Yes, I was in fact confusing the two. As I mentioned, I know I have to educate myself much more before making any decisions. I haven't yet settled on a market or really even a property type. I would like to go as big as possible provided of course that the property is a good deal (I am looking mainly for cash flow). I'm not ruling out buying smaller MFs though.

Hi -- Does anyone have an opinion or insight about buying a multifamily apartment building in West Harford right now? My wife and I are selling our 2-family Brooklyn house with the goal of 1031-exchanging into a larger multifamily. West Hartford looks interesting to us because it looks like we might be able to purchase a 15 or 20-unit building for less than $2mm.  We will likely sell our Brooklyn house for around $1.6mm. We are new to investing at this scale and we are not very familiar with the Hartford market, so any insight/warnings/opinions etc. would probably be a big help to us as we try to educate ourselves before making this move. Thanks! -- Karl

Chris and Joe -- Thanks for your responses.

Will -- Good points. Thank you!

Hi All,

My wife and I plan to purchase some properties in Maryland with another couple. We live in NYC, and the other couple (friends of ours) currently live in NJ but will be moving to Virginia in the near future (I don't know if where we live is relevant to my questions). Our joint long-term goal is to create a cash-flowing RE business. We will be setting up an LLC in Maryland to hold title to the properties, and we want to also have an LLC operating agreement in place for legal reasons and also so that we all can have confidence about how the business will be run in the future. We can set up the LLC ourselves via online resources, but we will be hiring an attorney to at least draft the operating agreement for us. My main question is, do we need to use a Maryland-based attorney to draft the operating agreement, or does it not matter where the attorney is based? Also, are RE attorneys typically experienced with drafting this type of agreement our do we need to contact a different type of attorney, such as a corporate attorney? Thank you in advance for your help!

- Karl

@Evan Polaski - Evan, Thank you for taking the time to respond! We will probably try to buy a small apartment building soon (5 or 6 unit maybe). We just need to educate ourselves better first, so I really appreciate the responses!

@Stace Caseria - Stace, Thanks for your insights! Very helpful!

@Rick Martin - Rick, Thanks so much for taking the time to respond. Very helpful information!