All Forum Posts by: Mohammed Milord

@Mohammed Milord, a 'disregarded LLC' is an LLC that only has one member and has elected to be taxed as a sole proprietor. This means it doesn't file it's own tax return. All of the activity of the property is reported on the tax return of the person or entity that is the member of the LLC.

You own an LLC. You are the only member. It has elected to be taxed as a sole proprietor. It does not file a tax return. All activity of the property is reported on your personal tax return. The LLC is disregarded to you - The IRS considers you to be the taxpayer for the property even though it is deeded to the LLC.

Same situation if there is a parent LLC that is the sole member of several junior (or series LLCs ). If those LLCs do not file their own tax return then all activity is reported on the tax return by the parent LLC. The junior LLCs are disregarded and the IRS considers the parent LLC to be the tax payer for the properties owned by the junior LLCs.

In both of those cases the LLCs are selling the property because they are the deeded owners. But the tax payer is you (or the parent LLC in the example). So you can sell the property as the LLCs and purchase in another LLC that is also disregarded.

The 1031 can be done by any tax paying entity. That is not an issue. And you sell disregarded LLCs the same way you sell any LLC - Either the LLC sells the property in which case you still own the LLC. Or the member who owns the LLC sells the LLC which means that the LLC still owns the property and someone else is now the member (owner) of the LLC>

@Mohammed Milord, like @Mark H. Porter said, if the LLCs are all disregarded to the same entity then it is no problem at all. Sell as three disregarded LLCS and buy as one new LLC that is also disregarded or as any one of the other three LLCs.

@Mohammed Milord, The taxpayer for the old property has to be the same taxpayer for the new property. If your LLCs file tax returns then they are the tax payer for your properties. You must sell as the LLC and buy as the LLC. Selling a property does not mean you lose the LLC. It just means that your LLC sold an asset.

If your LLCs are single member LLCs that do not file a tax return then all activity of the properties are reported on your personal tax return. In that event you are the actual tax payer. So you can sell as the LLC and buy as yourself or another LLC that is "disregarded" like the other.

Either way you do not lose the LLC. The LLC sells an asset.

There is a few ways to do "100 % Financing" using a DSCR Loan

1. A Gift Letter 

2. Using a HELOC from your primary to fund the additional 20%

3. Doing a Cash-out Refinance on your primary to fund the additional 20% 

@Erik Estrada I don't own a primary home, I'm renting so a HELOC and cash-out refinance won't work for me.

A personal loan won't work. On top of that you are jeopardizing yourself with a much higher interest rate if you do take on a personal loan. 

 What I mean is go seek off market deals yourself. Drive for Dollars......find the deals yourself and youll be direct to seller and you can control the deal 

Partnerships are great if you're looking to get started. Many hands make light work. Many wallets can support a large deal. If you're looking to ask the partner to fund the purchase, what are you bringing to the table? A lot of people will want to see what your downside is as well. If you have no skin in the game, why would they want to trust you with their money and you reap the rewards together?

It may not hurt to find a real estate agent that you mesh well with first. You might not know someone that is looking to partner up for a deal but the agent might. The only challenge is that most agents will not work with you until you have pre-approval. It wouldn't make sense for you to fall in love with a deal if you can't pay for the deal. 

It won't hurt to look for both a partner and an agent but you will want to know how you are providing them enough value to work with you.

I would find an experienced partner first........one that has done deals before. He can help structure it for you as well. I would also look for deals your self.....off market