All Forum Posts by: Wayne Gilroy

Thank you both for the replies. I've decided to forego the LLC/Trust path and keep things mostly as they are. I found no real tax benefit for my situation by starting an LLC, in fact, it was going to cost me slightly more per year between the annual registrations and the extra tax filings I'd have to pay my accountant.

The only change I'm going to make is to increase my umbrella policy. It's cheap insurance with a lot of coverage.

Thanks again!

I own two rental properties - a single-family home and a triplex. I currently have no LLC or official business entity. I also claim income/loss/expenses for a small "farming" venture on my personal property that includes - sale of eggs, firewood sales, sawmilling services, renting pasture space, and services such as snow removal and driveway grading.

I'd like to put each rental property in its own LLC or trust. I'd like to put the farming goods and services into its own LLC or trust.

I'm looking for advice on how to structure all of this in terms of LLC or Trust. I've read different things on Biggerpockets and Reddit but am still a little fuzzy on details.

My original thought was to create a holding LLC to contain both rental properties (as separate LLCs) AND use the holding LLC to capture my farming activities. But now I'm not so sure. It sounds like a holding LLC is more for management and not for producing anything (the farm stuff). So now I'm thinking I should create a holding LLC and 3 subsidiary LLCs (rental 1, rental 2, farm).

So, my two questions are:

1. Does a holding LLC make sense for my goals above or should I consider just doing 3 LLCS with no holding LLC?

2. Some posts mention forming 1 LLC (to act like a holding LLC) but to create Trusts for each property/business(farm). It seems like the LLC and Trust are similar in liability protection. Does anyone have experience with Trust vs LLC?

Thanks in advance!   

$2200 in rents, Realtors value @ $130,000. 
Property screamS high crime area. YES or NO?

Actually no.  The neighborhood is quite nice.  Good school and very quiet area.  Not many rentals - mostly owner occupied single family homes.  

I have a triplex that I've owned for almost 25 years.  I'm trying to determine it's value should I decide to sell.  Finding comps in this area is difficult and the market seems to change a lot.   I have talked to a couple of realtors, but I feel they are pricing it kind of low.

I'll try to be brief and concise with the property description and numbers.  I would appreciate any feedback and opinions.

Age ~ 1940s

Unit 1: 450 sq ft. kitchenette. 1 bedroom. Full bath. Fairly up to date. Current rent 650.00
Unit 2: 800 sq ft. 2 bedroom.  Onsite laundry (shared). Recently updated.  Current rent 750.00
Unit 3: 800 sq ft. 2 bedroom.  Onsite laundry (shared). Attached 1 car garage. Needs updating but tenant will probably stay there until he dies (his words!).  heavy smoker and no reason to update until he moves out.  Current rent - 700.00
Detached garage - Less than 5 years old.  Interior is separated down the middle.  Also a separate entry and area just for landlord use.
Each garage unit current rent is $50.00

Total monthly income - $2200.00 x 12 = $26400 annually

Utilities - Owner paid as nothing is separated.  2016 for water, gas, electric - $3600
Storm water utility bill - $500.00
Insurance - $1000.00
Taxes - $3300.00
Misc Maint. $500.00 (lawn care, salt, paint, minor repairs)

Total annual costs - $8900.00

So roughly 17500.00 per year net income.

I do most minor repairs and some lawn care.  No management company.

The neighborhood is desirable.  Good schools, a lot of dog walkers and joggers in the evenings, quite streets, working or retired class type of neighborhood. The town is small enough to only have one large high school, but several elementary schools.  About 30k city population. I never have a problem renting any of the units.

The property will need a new boiler at some point (plumber quote of ~6k).  Electrical could use some updating.  Probably Switch two electric stoves and electric dryer to natural gas at some point.  
Building has nice yard space, siding less than 5 years old, roof about 10 years old. All unites have off street parking.

County tax assessment is at 150k for the property.  Realtors' seem to think it should be listed for 130k - mostly due to the 3rd unit needing all new paint and flooring when the tenant moves out or dies.

Anyway, I'm looking for opinions on how to better assess this income producing property's value.