The flaw in this plan, IMO, is a possible misunderstanding of how CA tax assessments work.

I'd also try reaching out to people you do business with now either professionally or personally.

When professionals in this business buy we know what the arv is and what the rehab cost is.

The remaining expenses carryover to the future as a Passive Activity Loss (PAL).Exception:If you qualify as a real estate professional, you are able to deduct more than the 25k allowance and are able to deduct passive real estate losses if you AGI exceeds 150k.Chris Masons, That is why I'm the Tax Guy.

In both cases I would have a professional company manage the property.Does that seem like a safe bet ?

., you did something that you really should have known better that resulted in damage/injury), a judge could allow damages against you personally.These are the two situations that I can think of where an LLC wouldn't be very helpful, and these may be the situations where your attorney/CPA were thinking you needed more than an LLC.All that said, I couldn't even pretend to be a lawyer, so please don't take anything above as anything but the rambling of a non-professional who believes too much of what he reads on the Internet.

You want to be part of the conversation, so demonstrate your own rationale for why the deal makes sense.Finally, providing a clear and professional presentation delivers the message that you're no amateur -- you know how deals work and you know what you're talking about.

HML's, in my opion have a bad reputation due to the lack of professionalism, honesty and integrity of those who basically enter the arena with a sence of ruthlessness about profits driven by greed than any public service, not all, but enough to taint the barrel.Wearing a suit doesn't make you a professional, neither does a bank account, a college education or having an office.

It's not your final calculation, it's your 1st assessment of value.

As Steven says, you may want to use the ratio from the county assessment to split your purchase price into land and improvements.