All Forum Posts by: Kurt Hines

I don't know them, but I've heard Brandon Hall and Amanda Han on the BP Podcast. I have Brandon on my list to consider, as he runs a entirely virtual CPA company focused 100% on real estate. According to Amanda's site, she also works virtually.

Brandon: https://www.therealestatecpa.com

Amanda: http://keystonecpa.com

Good luck in your Real Estate journey!

Here is a post that goes through what you need to know to Bird Dog. Hopefully it helps!

https://www.biggerpockets.com/forums/12/topics/36914-attention-birddogs-this-is-a-must-read-for-you-7-steps-to-get-started-now-

I know there are banks out there that will do loans on less than 50k, but they are in a minority.

So far you've tried 5 banks. Based on what I've heard from my area, you might need to call a lot more banks before you find one that will do it, but with enough calls, you hopefully can find one. Or, maybe someone from Georgia will see this post, and know a bank that does these loans.

Hi Everyone,

I originally posted this in the Multifamily forum, but no replies, so reposting it here.

I'm curious what people are seeing for Natural Gas heating cost for Duplexes, Triplexes, and Fourplexes in Michigan. It seems that most of the multiplexes I see have combined heat, and separate electric. That heat would really seem to hurt cashflow, and I'm hoping I'm being too conservative in my natural gas costs.

Thanks!

You are taxed on the NET income, not Gross. Take your monthly rent and subtract all your costs (including depreciation.) You are taxed in the remaining amount. But, with depreciation, the amount left over may be minimal or negative.

Welcome to BP @Logan Yordanich. I highly recommend experimenting with the BP calculators.  You can use them 5 times as a free member, and they are well worth the upgrade to premium alone. they are a great way to get a handle on the numbers. (Especially multifamily, as the costs in Michigan can get high since you often have to pay for the heat.)

Hi @Heidi Wills. I'm just getting started myself, and live in the northern lower peninsula of Michigan. Where in upper Michigan are you looking to invest?

There are also major tax benefits to getting paid through a company as @William Hochstedler suggests. The basics are below for a S-Corp (I believe LLC with S election works the same way, but I don't have experience with that). I highly recommend talking to an accountant familiar with this, instead of doing it on your own. This does not mean an H&R block tax preparer, but an accountant or CPA that does business and personal returns. It sounds like you make enough income where the accountant will easily pay for him or herself.

When you are getting paid 1099 income, on your tax return you are treated as a sole proprietor, and are paying SE tax of 15.3% on top of your normal tax rate. This also puts you at a higher audit risk. You will want to setup either an S-corp, or a LLC with a S election. The S is important, as it changes your tax profile.

Now, all your 1099 income gets paid to your company. It flows from your company to you in 3 different ways

1. Paying for expenses directly from company funds, and expense reimbursement of items you paid for personally. This is not taxed at all, since it is deducted dollar for dollar from your Gross Revenue (1099 income.) (You have to be careful here about co-mingling personal and business accounts, but an accountant can walk you through it.)

2. Profit that flows to you on a Schedule K-1. This is taxed at your normal rate, with no SE tax.

3. A reasonable income that your company pays you. You pay your normal income tax on this, plus the equivalent of SE Tax. Reasonable is defined based on the variety of positions you do, and an accountant can figure out.

Your tax return will now show 2 income streams, W-2 Income from your corporation, and profit from your corporation.  I successfully used this strategy in the past to get mortgages, and they counted both my W-2 income, and my profit.

This doesn't help you right now with renting an apartment, but it will help you in the future, and will help you save money each year to go towards that up north house. 

Good Luck.

Hi Everyone,

I'm curious what people are seeing for Natural Gas heating cost for Duplexes, Triplexes, and Fourplexes in Michigan.  It seems that most of the multiplexes I see have combined heat, and separate electric.  That heat would really seem to hurt cashflow, and I'm hoping I'm being too conservative in my natural gas costs.

I'm looking for the Metro Detroit area in addition to northern Michigan.

Thanks!

Welcome to Bigger Pockets @Michael Allen! I hope you find BP as useful as I have!