All Forum Posts by: Mariah Jeffery

I have a property with two garages on it. I found out one of the garages is rented because my father in law was there and saw the tenant coming out of it. He asked how long he has been there and what he is paying. He is paying $45 per month rent since April, and this has not shown up on our statement. My father in law walked into the property management company and asked about it. They looked him straight in the eye and said that no one is renting the garage. I'm in complete shock. Should I take legal action?

No, she's not on her death bed. She is planning marriage to a much younger man in 2013 and even though she plans on a pre-nup, she's not taking any chances. She has decided she wants to either gift my husband at least a 51% majority of her shares in the corporation or put them into a trust for him, to ensure that it stays in the family after her death.

For those of you with lots of property, are you holding it in a trust? What type of estate plan do you have set up?

I'm asking because my husband and I are about to inherit some property from his mom (shares of a corporation which holds ranch land) and we'd like to know
1) How she can get the shares to us with minimal/no tax consequences (should it be put in a trust or should she simply gift shares to us)?
2) How can we hold this property so that our assets will be protected?

I'm confused on gift limits. Can MIL exceed the $13K per person limit if she dips into her liftetime exclusion, which is $5M this year and set to revert to $1M in 2013?

We do plan to involve a lawyer and CPA, but I'm trying to do preliminary research so I go into the meeting focused and educated.

I don't, but I have enough properties now that I don't necessarily add to the reserve fund for every new property I buy. Basically I'm pooling the risk.

A friend of mine just suggested MIL set up a trust to put my husband in control of the property and make him the owner when she dies. He claims she can include up to $1M in the trust and this would effectively "gift" all of the shares to him now, without tax consequences or having to set the basis arbitrarily low. Does this sound right?

The land is already leased to a cattle rancher and we definitely have no plans to change this or the tax status any time soon.

Do you have family in the area that could look over your properties and the management co. after you move?

My 28 rentals are in another state where I never lived, but my father in law lives in the area and is a general handy man. He does the maintenance for us. It has worked out, despite the advice not to do business with family.

I wish we knew the future. I wouldn't mind selling off some parcels and building our dream home there on best 20 or so remaining acres, but my husband prefers to keep it all in the family. Most likely, our daughter will end up selling it when we die. We had considered a business venture, such as a bed and breakfast. However, that would require a huge capital outlay and neither of us has any experience with a bed and breakfast, and my husband and I both have full-time jobs and live in another state.

This ranch happens to be in the general area where we have our 28 rentals, and we are tentatively planning to retire early (about 20 years from now) and build a home on this land. With time on our hands then, we may come up with a business venture involving this land, but I have no idea what it will be, only that it probably won't involve selling. Right now, the property taxes are low because it's ag land, and as soon as we change it to commercial purposes, both tax and insurance will quadruple, so we really better have a good plan to bring in cash flow with any business venture.

One thing I'm hoping, when I learn more about the rules involved, is that we can take advantage of having both an LLC and a C-corp.

Unfortunately I can't be much help. I've really only looked at the east side of Orlando. My sister is about to become a landlord there because she bought a new home and will be renting out her previous home in Altamonte Springs. She paid $60K and will be renting it out for $850/month. That's not 2% rule material, but not bad considering she became a landlord by mistake!

In my case I would probably settle for something similar, just because of the additional write-off potential, but I haven't had time to get serious about it.

You are very young and rates are very low. Both of those things point toward buying more rentals, but only you can determine your comfort level.

I started buying rentals at 26 and I paid only the bare minimum so I could use excess cash flow. This last year, my husband and I got to 28 units (we were 31, now 32). Now we are actually considering paying some of our highest rate mortgages down, simply because we don't think we want to buy more rentals any time soon. We have our hands full with the ones we have, full-time jobs, and our daughter. We're glad we haven't paid anything down before now, though, because we would not have been able to jump on the good deal we took advantage of without significant cash reserves.

Another thing to consider is liability. If your properties are not in an LLC and they are paid off, this makes them a prime target for a lawsuit.