All Forum Posts by: Ted DeVitto

You would need to speak to your accountant to get exact figures because of vesting and things of that nature, but I would assume the penalties of withdrawing your money early would easily not make the deal feasible. The IRS will take 10% off the top, in addition to taxes that are due. Don't forget, there are a lot of expenses and unforeseen issues that can arise. Not saying it will happen, but I've been woken up to phone calls that required thousands of dollars to fix. I would be uncomfortable setting myself that far behind personally. 

 I am in Schuylkill county as well, and planned to do this. What am I in for? 

 Hi Mike,

I apologize for the misread. I have less experience with that then I do houses, but the concept is very much the same. By creating the LLC, you are insulating yourself personally, should you experience any legal complications. That's just my approach, but I would implore you to see what others think.

Ultimately it is up to you, but most people will say that you should. It costs a little money to get it going, and come tax time, it costs a little more because accountants charge per entity. The question you have to ask yourself is, how many assets do you have? If someone gets hurt, they can sue and end up taking you for all you are worth. It all comes down to your aversion to risk. By putting each house in its own LLC, you create a ceiling of losses that you can sustain in a given circumstance. It is more complicated, and expensive, but that is something each investor needs to decide on their own.

Hi Dan,

Do you have separate quickbooks files for the property in the LLC, and the others that aren't?

 Hi Tracey, I second Raymond's approach. PA has great cap rates, and its a good place to start due to their low prices. Of course this isn't for every investor, but it works for me. It all comes down to what your goal is. Are you looking for properties that appreciate? Properties that cash flow? Both? Identify what it is that you are after, and the rest will start to make more sense. 

Hi BP Community!

My name is Ted, I am an investor from New York. A buddy of mine told me about BP about a year ago. I thought it was a cool idea, so I checked the site out and was blown away by how much content was on here. So much so that I was overwhelmed, and X'ed off the site for a few months! Fast forward a few more months and I finally made the leap. I purchased my first investment property back in October, and my second in December. All of a sudden all of these overwhelming posts, theories, and discussions began to make a lot more sense! Now that I am in the game, I have decided to dive deep into the BP community. I have been watching podcasts whenever I can, along with browsing the forums. I believe being more in touch with the community can help me grow by learning from others, as well as sharing any experiences that I have to add to the pool. The knowledge and support that I have been finding on this site is absolutely magnetic, and I simply wish to be apart of it.

I look forward to meeting you all, and as always, if anyone has any questions, feel free to ask. 

Thank you!

-Ted

@Bryan Hill I am certainly no expert, but I believe they are just considered an expense to your company (at least that's how I treat my management company and their work). They make a monthly fee, but the rest of what they do is dependent on the repairs needed. Also, I am assuming you don't pay them benefits, give them sick time, and have other employee like bonuses. These are things that can be brought up should you ever need to defend their status as a 1099, not a W-2 worker.