All Forum Posts by: Cameron Skinner

You can actually just do a quitclaim deed into an LLC, Bank would not be the wiser unless you refinance or have a balloon that comes due. All lenders have a due on sale clause in their loan documents, but as long as your current they never use those if you transfer into an LLC a trust etc. It's not like they go trolling the public records on every mortgage they hold. I transferred several of my properties in the LLCs and have never had an issue. Be careful though, depends on your state, but you might trigger doc stamps or other transfer taxes by deeding into a separate entity. Also check your insurance make sure they don't have an issue with it being in an LLC.

I had similar issues in Florida bought a lot for over 500,000 I build spec homes but market crashed before I could build that one. Lots were selling for as low as 120,000. What I did was to build my own personal home cost to build 320,000. Your able to convert lot from business asset to personal at Fair market value and take tax loss against other capital gain. Then live in home wait till appreciation pulls you out. Your tax bases will be low because write down but does not matter because capital gain on your personal home not taxable up too certain limitations. My home now up to about 650ish so I'm still down about 180 but moving we're moving in the right direction. Plus the tax benefit has soften the blow. Good luck

@Anthony Arias if your just flipping contracts you would file that on a schedule C not E. E is for rental property C is small business. Keep records of everything you spent on set up LLC you can take that as start up cost when you start. also keep a mileage most newbies don't do this IRS standard mileage rate is 57.5 real estate guys can rack up some miles looking at property I logged 22,000 miles last year lowered my taxable income by over 12,000. there are several free mileage apps or just pick up a mileage log from office supply store Good Luck

Don't worry it's not uncommon for business to file their docs but not start business until the following year. If irs does send you a letter asking where is this LLC reported, just send back explanation it did not start business until 2015. And yes I would treat LLC as a disregarded entity for tax purposes when you do buy your first property which means you report your property on your own personal return on schedule E. The compliance cost for s-corp is not worth it for a new investor.

Irs allows you to treat a single member LLC as a "disregarded entity" basically you get the liability protection of an LLC but you can file your taxes on schedule E like you own it personally. You can also elect to treat LLC as an s-corp but you would have to treat it as a separate company and file an 1120-s

You can only group properties like duplexes apartment ect. Separate properties need to be broken up for a host of reasons. If you have multiple properties you really need to get an accountant who specializes in rental property or better yet has some himself, I promise turbo tax really bad at rental property especially depreciation. You'll easily save what you pay him in reduced taxes. Ask him how you can qualify as real estate professional and how to calculate cost segregation depreciation on your new purchases.

I believe 1031 is identify in 45 day close in 180 days you can 1031 into 3 modest homes and get 1,000 a month each with no HOA dues. HOAs can go crazy get an attorney on the board who wants to sue developer for some minor defect 100k in legal fees special assessment manager embezzles dues special assessment roof goes out special assessment. My dad owns condo all above happened to him.

Llc will give you a level of protection from liability created by your property against your personal assets. But if ABC LLC owns a rental home and it collapses and hurts someone they can sue ABC LLC, but not you personally. Ii you have a loan against property no worries as they have little to go after even if you have good equity cost to sue then foreclose and pay off mortgage does not make economic since. One problem is you can't avoid personal liability in LLC. In other words if house collapses and hurts someone and your the one who tore out the load bearing wall you can be held personally liable, so if you have a lot of assets personally with no loans against them add umbrella policy.