All Forum Posts by: Leon D.

So, you're saying that you want to manage other people's property, and make yourself liable for anything you mess up, so you can learn what to do (or not) before you invest yourself? 

If you have no experience in real estate (let alone property management), why would someone hire you?

C-corps don't have owners.

No one owns a c-corporation, they are their own entities with their own EINs, manager(s), and (maybe) shareholders.

A single-member LLC will have its own EIN, but since it's a disregarded entity, of course the single member will need an EIN/SSN (whether that member is a person or another entity). A multi-member LLC may have individuals or other entities as members, each with their own EIN/SSN. An LLC does not exist without its member(s) and it can't have shelf (sometimes called treasury) stock; that is, it can't own shares in itself.

A c-corp exists regardless of whether or not it has shareholders, so it doesn't strictly matter whether its manager is a US citizen with an SSN/EIN, or whether any of its possible shareholders are. It doesn't have to issue shares or issue dividends.

Just about anyone can open/start/found a c-corp, US citizenship is not a requirement. Once properly registered, the corporation is the US entity, and no one will care about any non-US involvement, at least as far as a bank account goes.

My first thought would be to set up an LLC or c-corp for each borrower. It's onerous, but may be worth investigating if the dollar amounts are high enough. The problem (so to speak) with foreign nationals is of course that they usually have no SSN or EIN or other way for the IRS and other regulatory bodies to track income, taxes, money laundering, etc. But a corporation is a legal person, with an EIN and other legal trappings, and can open a bank account with an authorized agent (accountant, officer, lawyer, etc).

There are a few things missing to give an accurate answer, such as whether you own the property personally, or through a corporation (not an LLC, an actual C or S Corp). But, I would generally say that: 1) If you own it personally or through a disregarded entity like an LLC, then Yes, I'd think you would still pay taxes. You receive the income, which is taxable. Whether you use it to buy a car, or go on vacation, or pay down the mortgage principal makes no difference. At least you can take comfort in knowing you've paid down the principal a bit and increased your equity. 2) If it's owned through a corporation, their MAY be a way to categorize the extra principal payment as an expense, thereby lowering the corporation's taxable income by some amount. Don't quote me though; maybe it can be done, maybe not. Would have to ask a CPA conversant with this sort of thing.

Eight bedrooms sounds like a large home. 4500 square feet is not. My condo is a 4BR, and I'm around 3100 square feet. How's the neighborhood? I'd say probably leave it an SFR, just make sure everything's up to code. I think you might be surprised at the demand you could generate if you updated (as needed) electric, plumbing, cable/phone, HVAC, etc. A lot of times, it's the fear of these things that keeps price and demand low. Have the furniture and such appraised and sold, or keep what you like; clean, fix, update, and then sell that bad boy. The other ideas are all well and good, but require probable rezoning, permitting, licensing, ongoing inspections by several government agencies, and a willing operator that OK being tied to the place to begin with. Good luck.

Difficult questions to answer without knowing things such as:

1) Target property type: SFR, 2-4 unit MFR, 5+ unit, mixed use?

2) Your budget?

3) Your financing options?

I would start looking at PM companies now, and also an agent. They'd both be great resources for you before you buy anything.

@Art Maydan are you new to Chicago? I ask because it seems like an odd question for anyone who's been in the city more than a few months.

As is obvious by looking around, the big money in development is big MFRs (high-rise condo or rentals in River North, Printers Row, etc), or large SFRs (Lincoln Park and Roscoe Village, for example). By virtue of its geography, Chicago developed more like Brooklyn than Manhattan. Post Great Fire and up to WWII, lots of 2-8 unit walkups and mixed-use properties were built, but there's never been any economic incentive to later wreck and redevelop them, so they stick around. Rezoning is also a sticky point, since permission must be sought from your ward's alderman (so get and stay on their good side). I've seen plenty of cases where they yank approval just before a deal closes, or one builder gets it and another doesn't.

In time, and with luck, a neighborhood gets hot, and gives someone the idea to scrape a lot and take advantage of the market. Lincoln Park used to be close to a war zone, a few decades ago. Now we can't get enough $3m+ SFRs.

@Bryan Sowieja You're argument fails for any number of reasons:

1) Legal: what you have overlooked is that while weight may not be a federally protected class, you've forgotten about other jurisdictions. Washington DC, the state of Michigan, and the cities of Madison (WI), Binghamton (NY), Urbana (IL), Santa Cruz (CA), and San Francisco (CA) all prohibit weight discrimination. Perhaps Minnesota is looking to do something similar; if not, I'm sure they will when your policy sees the light of day.

2) Scientific: why 300 lbs? What is different about a person at 280 lbs, or 295 lbs? Do you have anything other than your own prejudice to support a claim about wear-and-tear?

3) Economic: to what wear and tear are you referring? Are you afraid they'll turn a doorknob too hard? Have you quantified what you believe to be the marginal cost of a 300 lbs tenant? You know, most every tenant does make a security deposit...

4) Moral/ethical: "your surname looks Polish. Just because I don't like the smell of grilled kielbasa when I come around, I'm not going to rent to anyone with a Polish last name." That's your reasoning.

5) Your day job: Kennys Vargas (a first baseman you should be familiar with...) weighs 289 lbs, currently. Would you evict him if he gained a few pounds over the holidays and didn't make weight on the first day of spring training?

I make a point of really trying to avoid ad hominem attacks, but this time I just can't help myself. You're a first-class idiot.

A few questions:

1) Doesn't the building/unit already have a phone line? There shouldn't be any reason she couldn't use this line, I don't know any technical reason she'd need a new one.

2) Is she aware of cable-based internet in the building/unit? Maybe the DSL request just comes from ignorance?

Crappy internet is definitely not a retro fashion statement.