All Forum Posts by: Richard Warren

Originally posted by Jason Peters:

edit: I would need 100% financing as of now FYI

With that clarification it would seem that you only have two real options. Even a hard money lender is going to want a down payment of some sort. Your options are private money, difficult for someone without a track record. Or find deals with seller financing, not easy but possible.

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Don’t be so depressed. No bank is going to lend to a new LLC anyway. You need to establish credit for the LLC and most banks will require a MINIMUM of 2 years credit history.

So form your LLC and get a tax ID number from the IRS. Then go to Office Depot or a similar office supply store. They’ll probably give you a $250 credit line that you can use for supplies. Using it will be reported on your LLC’s credit report and help you get established. Next you can go to Lowe’s and Home Depot and get cards there as well. Your credit line will be small unless you offer a personal guarantee but they will gradually increase over time. Use these cards to make some small purchase as well. Make all of your payments on time and you will have a track record by the time your LLC is old enough to be considered by the banks.

In the meantime you can get loans in your own name or use private money and seller financing to make your deals.

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This is a good one:

"Landlady bug-bombed me"

Story: http://www.nypost.com/p/news/local/queens/landlady_bug_bombed_me_3JsgBHA9LZ6lF7pN5EW7vI

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Originally posted by Jon Holdman:

Avoid HOAs. With an HOA a property is never paid for. An HOA can have input on every decision you make for a property.

While I agree with that statement, it isn't always easy. In the Las Vegas market it is extremely difficult to find homes without some type of HOA unless you are buying in very old areas. If you do have to buy with an HOA do some research first.

Some other rules of thumb:

You won't go broke making a profit.

Spend less than you make.

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Originally posted by Glen Rosen:

I want to live in a fairly large city with job opportunites. I may only stay for a year or two, then I'll rent the house out.

Job opportunities are scarce in Vegas. The official unemployment rate is about 13% with the real rate being in excess of 20%. If you come here expecting to find a job you may be disappointed.

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To replace the assets the grantor will purchase a life insurance policy. The cost of the policy, if the grantor is in good health, is often much less than the amount of taxes saved. That is really meant to replace the assets to the heirs. That is why it is done as an estate planning technique. The person giving the seminar may have been a life insurance salesperson. Either you missed some of the details (like the fact that you need to die to make it work) or the speaker didn’t communicate everything properly.

To reiterate – investigate 1031 exchanges. They are much more appropriate for someone your age.

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Ali,
You are 26 years old. Do you really want to give away assets to eliminate taxes? That is ultimately what you are doing. CRTs are irrevocable - they can't be rescinded. It is generally used by much older people.

You should research 1031 exchanges. That will allow you indefinitely defer the capital gain taxes. However, you still retain full control of the asset. That is not the case with CRTs.

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What exactly are you trying to accomplish?

CRTs are used as an estate planning technique to minimize or avoid capital gain taxes.

The short version:
Appreciated property is placed into the trust. It is sold tax-free because charities don’t pay tax. The proceeds are reinvested in income producing investments with the income being paid to the grantor (person who created the trust). That income is taxable unless tax-free bonds are used.

The proceeds are distributed to the selected charity at the grantor’s death.

The grantor receives an income tax deduction for the gift to charity. That tax deduction is based on the life expectancy of the grantor (IRS has tables for this).

Life insurance is frequently used to replace the assets being donated to charity. Life insurance is held in an irrevocable life insurance trust in order to avoid estate taxes on the death benefit.

This is a common, yet sophisticated, estate planning technique.

What exactly are you hoping to achieve?

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Savannah, Georgia and Charleston, South Carolina are definitely great places to stop.

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Originally posted by Jon Holdman:

Squirrels = Rats with fluffy tails.

Squirrel = Rat with good PR.

I had this problem once. It took a while to figure out if it was a squirrel or racoon (was a squirrel). Either way, you should be able to find the access spot by looking around outside. They need a spot to get in and usually do so by climbing in off of the roof. We located the hole and sealed it during the day. It went nuts (trying to get at its nuts) for several days but eventually gave up trying to get in.

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