All Forum Posts by: Lewa O.

Hi,

Looking to get some insights from the experts. 

As a REI, we do our real estate transactions under an LLC (S Corp) that focuses mostly on new constructions funded via private lending.

Now an average time for us from land acquisition, development and sale is about 13-14 months. We also acquire 2-3 lots every year.

We end up showing losses on the LLC's annual tax returns since we have more operational costs (land acquisitions, development, interests, people etc costs) than revenue in the actual tax year. Our balance sheets at any given time depicts a more accurate representation of the business and shows a fair amount of assets vs liabilities.

We also maintain a W2 employment outside of this. We are currently trying to refinance one of our projects under our personal name to live in but running into some issues with proving an acceptable DTI under the personal income due to the pass through losses from our LLC. Without the SCORP losses we are good, with it on the returns not so much. 

This seems to be an underwriter problem. Our loan officer is trying his best but not sure how far he can go past the underwriter. The loan amount is for $900,000 while the property just appraised at $1,760,000. Credit/FICO score is 780.

Are there ways to get around this at all?

We have a CPA that handles all of our taxes but I’m beginning to think he might not be good at real estate taxes.

Thanks.

Hi,

Looking to get some insights from the experts.

As a REI, we do our real estate transactions under an LLC (S Corp) that focuses mostly on new constructions funded via private lending.

Now an average time for us from land acquisition, development and sale is about 13-14 months. We also acquire 2-3 lots every year.

We end up showing losses on the LLC's annual tax returns since we have more operational costs (land acquisitions, development, interests, people etc costs) than revenue in the actual tax year. Our balance sheets at any given time depicts a more accurate representation of the business and shows a fair amount of assets vs liabilities.

We also maintain a W2 employment outside of this. We are currently trying to refinance one of our projects under our personal name to live in but running into some issues with proving an acceptable DTI under the personal income due to the pass through losses from our LLC. Without the SCORP losses we are good, with it on the returns not so much.

Are there ways to get around this at all

And also any advice from other developers on the forum. How do y’all show profits on annual tax returns?

We have a CPA that handles all of our taxes but I’m beginning to think he might not be good at real estate taxes.

Thanks.