All Forum Posts by: Walt Payne

@Bill Exeter  What benefit do you get from the depreciation if you can't use it for income tax purposes? I understand the second part, just not the reason why it is advisable to take the depreciation in that case.

@Abou C.  I would say one important thing is talk to a good real estate asset lawyer and an accountant. The reason is that sometimes the two viewpoints are conflicting, and you need to weigh the merits of both in making decisions. Both of them should be investors themselves.

Ask that asset lawyer exactly what exposure you will have when operating in an LLC and what protection you will have. My money is on his answer being quite different from what @Account Closed said, and along the lines of what @Jerry W. stated.

I am not a lawyer, but I believe that a multi-owner LLC that is run properly will insulate against external liabilities effecting the assets. Internal liabilities (issues within the LLC such as an injury on one of the properties) must be insured against. But a properly run LLC CAN protect you against the liabilities carrying outside the LLC. It won't do that if your actions were criminal or negligent.

@Pedro Oliva  It depends on a lot of factors including available time, areas of expertise, what your likes and dislikes are, etc. 

The suggestion to invest in marketing and wholesale to build funds may be a great idea, or bad advice ... depends on what you know, and your personality. Investing with someone else might work, or might be a disaster. What I would suggest NOT doing is a mistake people make in REI all the time. Don't go out and buy a cheap property just because you can afford it.

@Steve Maye There are a lot of factors to consider, and you will probably get a number of strong opinions in favor of both paths. Here is my thinking:

I would do the mortgage, because the interest rates are so low right now. BUT, I would keep it at a relatively low payment. In other words I would go partway between the two. Get enough of a mortgage to give you seed money to start investing. But keep your mortgage payment low as a hedge against bad times (both personally and in the market).

Wow, $1525 Owner's policy twice? That is high for once, and they have no additional research for the second.

 Exactly! There are more things you need to be aware of, but if you know what to look for there are some great old houses. My first two personal residences were from the late 1800's and they were wonderful. And because I knew what to look for and what to do I made good money on them when I sold.

@Drew Denham  The same things as a newer property, plus lead paint, asbestos, underground oil tanks, poor or no insulation, old plumbing including possible lead drain pipes, copper pipes with lead solder, those are a few of the worst and most common.

@Jennifer Clancy  Brevard County, especially Palm Bay, has some good buys still. But wherever you buy it will take someone you trust to look after your interests. That is an important factor.

I can invest in the area because I have a brother there, but I would personally be very hesitant to invest long distance without some serious vetting of PMs etc.

@Account Closed  An employee by 1099? Isn't a 1099 specifically for non-employee situations, such as independent contractors?

My thoughts are that if you need an LLC, get the first one done by a professional. Then you may be able to use that as a template for future set-ups, depending on similarity. But having an LLC by itself does not guarantee protection. It must be done right.