All Forum Posts by: Sammy Lyon

Hey folks, getting together again in a couple weeks, check out the marketplace for Cleveland / LA!

Hey Cleveland lovers! Getting together again for an end of summer informal happy hour in Los Angeles. 

Join @John Koster @Shiva Bhaskar and I for some drinks and good convo, network, share CLE resources.

Thanks!

@Kathy Henley def meeting with my CPA next week. I didn't need a proof of funds for this particular deal since I knew the seller, but it felt unnecessary (like OP) to fully fund the LLC account without having a deal actually ready to close on.

@John Corey I have been avoiding using an LLC bc of the high cost of the minimum franchise tax in California, but most hard money lenders will only lend to a business. So might as well start! Have to just consider it a cost of being a Californian who is seeking financial freedom :) I was concerned the time it would take to transfer personal funds > LLC account > escrow would delay my closing so thought it would be easier to just wire directly from personal account to close, but it seems I will actually have enough time to do it all correctly through the LLC account.

@Nate Marshall I *think* the personal loan to the LLC has to charge interest for it to be considered a loan (as far as I've heard). I can charge myself a small amount of interest though I wonder how the interest payment is treated (from LLC account to personal account) - is it a draw or something else?

So many details to learn and grow! :)

Hi @Jacob Miller! I just took a trip out to Columbus to visit the market and met some great folks there. I found there is a lot of growth potential still in Columbus, and since you're living there you have a lot of options to get started. If I were local I'd be house hacking for sure.

Happy to connect and share any resources!

@Daniel Dietz how do you split the equity with your private money partners? sounds like you're doing JV type deals and I'm curious how you structure it! I also like this model.

@Mike G.

@Mike G. too with the letter idea :) 

Hi @Kathleen Frankovich, @Nicole A. @Kathy Henley @Josh Gangi! Reviving this thread instead of creating a new one, as I have a related question. Would love to know what you ended up doing!

I am making a cash purchase on a property and will be taking title in the name of my single-member LLC (which is taxed as a pass-through entity). I have the funds available in my personal bank account, and it would take several days to transfer those funds to the LLC bank account.

I had a similar question of whether I could just wire funds to close directly from my personal bank account, perhaps with a letter explaining these funds are allocated to purchasing a property in the name of the LLC? Or do I really need to first transfer the funds from my personal account to my LLC account, then wire funds to close from the LLC account? The LLC will only have held that money for a day or so, before it purchases the property.

If I do have to transfer funds first into my LLC account, what are the implications down the line of doing it as a capital contribution to the LLC versus as a loan from me to the LLC?

If I make a loan from myself to the LLC, I'm assuming I need to charge the LLC a fair interest rate. Am I then required to pay taxes on the interest I earn that I pay myself from the LLC? Would those be considered "draws," or how are they categorized?

(If someone has a sample loan agreement from their personal account to their LLC, that would be helpful to see how the loan terms are set up, like can I pay it all back in one lump sum at a later date, rather than having to pay myself interest from the LLC each year?)

To recap, I'm wondering:

• Can I just wire funds to close from my personal account and like Kathleen asked, skip making this huge contribution to the LLC bank account without knowing if it will go through?
• If I do give my LLC the money, what are the differences if I do it as a Loan or a Capital Contribution?
• If it is a loan, what's the best way to set up loaning funds to my own LLC?

Thanks BP community!!

@Maryann Harris for sure! I could talk real estate alllll day long with anyone who wants to hang out :)

@John Koster and @Shiva Bhaskar wanna do something again?

Hey @Chris Mason it’s for an off market deal directly with the owner. I figured there would be a lot of folks on BP who either work in the industry or can recommend people! 

Hey Bay Area real estate investors! Just checking back if anyone has / is an appraiser or inspector in Oakland or the East Bay. Thanks!