All Forum Posts by: Troy P.
Troy P. has started 23 posts and replied 182 times.
Post: Setting up multiple LLCs and Business Credit Cards
- Investor
- Baton Rouge, LA
- Posts 184
- Votes 165
Quote from @Sumit B.:
@Steve Vaughan
Question for all in this forum as I want to hear your thoughts.
I currently own 1 rental- it was originally a residential on personal name, we moved out and put in for rent. I do plan to keep as rental property as long as I can. My CPA advises to transfer the property in an LLC which I have been thinking of as well.
My first question is- I want to add another property as second home for STR probably out of state in FL, I have read and heard that with second home financing you only need to put 10-15% down payment.
If I do purchase second property as Vacation home, does this mean I cannot put this property in to existing LLC with my first rental property?
Or vacation rentals can not be put in an LLC, since it's a second home financed property?
Also second question-
when you open an LLC for rental property, does the credit card account needs to opened on personal name or can you open credit card on the LLC name? I have also watched videos that explains the difference between building personal credit and business credit for your LLC.
They were referring to the DUN & Bradstreet bureau and how to build your business credit?? I want to know if this applies to Rental properties LLC's as well??
I believe there are many vacation homes that are purchased under LLCs. But, you would have to go through the process of getting a commercial loan since you are purchasing as a business which would usually require a stronger down payment and less favorable terms. If I wanted to build credit for my business, then I would open a CC under that business name.
Post: Setting up multiple LLCs and Business Credit Cards
- Investor
- Baton Rouge, LA
- Posts 184
- Votes 165
Quote from @Brittany Guimond:
Getting back to the original question in this post, would you recommend having a biz credit card for each property, 1 biz credit card for all properties, or no biz credit card at all? @Drew Sygit @Troy P. @Steve Vaughan @Ponni Carlin
I would have a biz credit card per LLC. That LLC, regardless of who/what actually owns the properties in question, could encompass 1 property or it could encompass 20. This is not legal or tax advice, but the general rule is do not commingle funds, whether that is personal/business or business/business. Who is responsible for expenses in your situation? The homeowner or the landlord? Is the LLC the landlord on your lease or are you? To answer your question, I would give each LLC its own business CC if you're looking to build credit. Then, you must pay each of those CCs with the respective bank accounts for that business. This seems like an accounting nightmare for me personally, but that is what I would do given your situation.
Post: Tenant Installed a Window Unit A/C
- Investor
- Baton Rouge, LA
- Posts 184
- Votes 165
Post: Interest rates are not going back to 3%
- Investor
- Baton Rouge, LA
- Posts 184
- Votes 165
Quote from @James Hamling:
Quote from @Troy P.:
Quote from @Bruce Woodruff:
Quote from @Troy P.:
Completely untrue. I know a lot of folks that just bought or will be buying soon and 0% of them are 'wealthy'.....just normal people.
Now you might be correct if you said that only wealthy people can buy homes in SoCal on the beach, or on Staten Island.....but in general, naw, anyone that really wants to can buy houses.
Yes, I should have phrased that better. Anyone who wants a decent investment in a decent area and not wanting to dodge bullets every night is now facing a tough time making that "dream" happen due to a combination of prices, rates, and inflation going wild.
Lol.
OR another way of saying it is Business as usual.
The idea that an Investment Real Estate business should be simple, so simple that a person in minutes or hours can at most basic level just buy any old property, easily and readily make considerable profits, LOL, that's just infantile.
Being a Landlord is a BUSINESS. Being a real estate broker of any kind is a BUSINESS. Why is this basic fact overlooked so much today? This is not a slot-machine, it requires more skill and care than just sitting down, throwing a few $$$$'s into it and sitting back watching everything make $$$$. It simply does NOT work that way.
So difficult to find good deals, yup. Complexity in how to do it all, yup. The sun rises in the east and set's int he west, yup. Any other obvious facts?
There is nothing new in this facet of REI being a BUSINESS and requiring intelligent care and actions as ANY business requires. The only "change" is people thinking something differently, thinking it's supposed to be easy, simple, "cheap".
Name the business, any business, and online there will be tons of books preaching of how simple all those can be started also, so it's not the books fault. It's the fault of this "poof" generation that has become "e-z-junkies". They've never had to try at anything, get awarded for just showing up
Your imagination certainly went wild from such a simple post... I was mostly referring to the fact that a large number of people who could have been able to afford a home as a primary residence last year now cannot due to the combination of rising rates, rising prices, and rising inflation. I'm not sure how you discerned entitlement or lazy work ethic from my posts, but that was definitely not the intent. I agree with some of your points, just not sure how it was related.
Post: How to Claim Passive Losses without getting Audited
- Investor
- Baton Rouge, LA
- Posts 184
- Votes 165
Quote from @Todd Goedeke:
@Nancy Bachety it should be filed on schedule C. (Business income or loss)
https://www.hrblock.com/tax-ce...
Post: Setting up multiple LLCs and Business Credit Cards
- Investor
- Baton Rouge, LA
- Posts 184
- Votes 165
Quote from @Brittany Guimond:
@Courtney Walker benefit for us is liability protection with our tenants. Since every payment flows through the LLC, if they ever came after us, they wouldn't be able to come after our personal or other biz assets. And if it ever came down to going after the property in question, my CPA tells me the umbrella insurance policy we have should protect us 🤷🏼♀️
I'm sorry, but I believe you misunderstood at some point. If you own the property personally, then YOU are liable for any claims against the property. Running your funds through an LLC is nothing more than a Property Management LLC. You are correct that other business assets may be somewhat shielded, but your personal assets are not shielded from a tenant living on your property. The only thing protecting you at this point is the umbrella insurance, not the LLC. If you have an LLC per property, then you have a separate PM company per property. It may be nice for accounting, but offers no protection.
Post: Best ways to collect rent (electronically)
- Investor
- Baton Rouge, LA
- Posts 184
- Votes 165
Post: Interest rates are not going back to 3%
- Investor
- Baton Rouge, LA
- Posts 184
- Votes 165
Quote from @Bruce Woodruff:
Quote from @Troy P.:
Completely untrue. I know a lot of folks that just bought or will be buying soon and 0% of them are 'wealthy'.....just normal people.
Now you might be correct if you said that only wealthy people can buy homes in SoCal on the beach, or on Staten Island.....but in general, naw, anyone that really wants to can buy houses.
Yes, I should have phrased that better. Anyone who wants a decent investment in a decent area and not wanting to dodge bullets every night is now facing a tough time making that "dream" happen due to a combination of prices, rates, and inflation going wild.
Post: Interest rates are not going back to 3%
- Investor
- Baton Rouge, LA
- Posts 184
- Votes 165
Quote from @Carlos Ptriawan:
Quote from @Russell Brazil:
Quote from @Troy P.:
yes and in the whole universe, housing in US is still the most affordable compare to any other, daily mortgage payment in midwest is only twenty dollar, come on man, it's too affordable LOL
I see LOTS of affordable housing in my area as well. The problem is, people don't want to live in that area. But even worse, investors don't want to spend money in that area either knowing appreciation is non-existent, no decent tenants to attract, crime is on the rise, etc. The government tries to entice you by waving tax benefits in front of you, but it only works to certain extent. I bought a nice rental property in 2022 with a daily payment of $18. A year later, that is now unheard of for any half-decent area.
Post: Interest rates are not going back to 3%
- Investor
- Baton Rouge, LA
- Posts 184
- Votes 165
Quote from @Russell Brazil:
Quote from @Troy P.:
Quote from @Russell Brazil:
Quote from @Troy P.:
Rates went up for the 40 years prior to the downward trend. Home prices also continued to go up during that time.
You know what that tells me. Inflation happens whether we are in a rising interest rate environment.....or a falling interest rate environment.
Sure, and I'm no Economics expert, but wouldn't we need to look at affordability? Average household income has only increased 16% in the last 30 years. 16 percent! During that same time, home prices have gone up 254%. 254 percent!! Maybe I'm not looking at something correctly, but it all seems pretty simple. Only the wealthy are able to buy homes. This was realized last year which is why the split between interest rates on primary vs investment was increase so much, per a lender I spoke to recently. Below is home values over time as well as household income over time, in today's dollars.
The narrative on unaffordable housing has been a multigenerational narrative. It is nothing new. Search these forums, not that long ago I posted articles from the 60s, 70s and 80s that you think could have been written yesterday. This one article below is from 1979.
Inflation doesnt care if housing is affordable.
Thanks for the info, I'll certainly give this a read.