All Forum Posts by: Dan Schwartz

@Armand Farr NOLO suggests I am wrong.  Read here:

https://www.nolo.com/legal-enc...

1) you can split the income like you describe (no one to stop you), but the IRS won’t like that.  You have a partnership and need to file a 1065

2) there's no such thing as an LLC return. If you're a partnership, file a 1065.

3) multiple entities require multiple returns.  You probably have to swallow it for 2019 (and 2020, since you are already operating this year), but you should probably talk with a professional on how to best structure yourselves according to your priorities. 

Is this accountant still recommending people buy a bigger house for no reason other than the client makes a lot of money?

@Tehane Gallimore Bears? Sell! :-)

@Dan H. are you suggesting taking equity out as cash, investing it in high quality bonds at a brokerage, then, borrowing from the brokerage against the bonds when the time is right to purchase more real estate?  Trying to wrap my head around your post....   thanks.  

@Joe M. you gotta read up on balance sheets, especially if you want to use net worth as a measuring stick.  You took $20K in cash (which is an asset) and presto change-o turned it into a $100K asset (the house) with the aid of an $80K loan.  Your assets and liabilities both increased by $80K ($20K --> $100K, and $0 --> $80K), so your net worth did not change.  

@Eric X. open an account at Treasury Direct and invest in 4-week Treasury Notes.  Absent a promo from a bank, your interest rate should be as high or higher than the best bank/CU rates, and one can argue that the US Treasury will be the last of all banks to go under, if that’s a concern of yours.  

“I got a letter from a lawyer that part of my driveway is on his clients property.”

“The neighbor has been here for 30yrs and said it’s always been as it is.”

“The lawyer works for the company that just purchased the complex behind my neighbor and I. The neighbor couldn’t grasp what I was telling him at first.”

@Handel Carter So is your neighbor selling his or her property to the company that just purchased the complex behind the two of you?  

@John Fitch I don't know anything about LLC law or costs outside of AZ, but if I were doing what you propose in AZ, I'd absolutely form an LLC for it.

Form the LLC, make an equity contribution of $150k, buy the foreclosure and fund the rehab SOLELY with funds from the LLC bank account (if you need to add more funding to the project, deposit it in the LLC bank account first), and then sell it with the LLC as the seller. The proceeds will go to the LLC, but you as the sole member can control when they are distributed back to you.

@Antonio Albarran check out Castro Accountancy Corporation on Shaw Avenue.  I’ve known Emmett Castro for a long time and he’s given very good advice on a number of issues.  There is a good staff on board and let them know that you want to work with someone very experienced in real estate investment.