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feedback needed on this i (by redwoods [WV]) Mar 29, 2019 5:38 AM
       feedback needed on this i (by NE [PA]) Mar 29, 2019 5:40 AM
       feedback needed on this i (by redwoods [WV]) Mar 29, 2019 5:50 AM
       feedback needed on this i (by NE [PA]) Mar 29, 2019 5:52 AM
       feedback needed on this i (by NE [PA]) Mar 29, 2019 5:53 AM
       feedback needed on this i (by redwoods [WV]) Mar 29, 2019 5:55 AM
       feedback needed on this i (by redwoods [WV]) Mar 29, 2019 5:59 AM
       feedback needed on this i (by Rick [IN]) Mar 29, 2019 6:01 AM
       feedback needed on this i (by redwoods [WV]) Mar 29, 2019 6:04 AM
       feedback needed on this i (by redwoods [WV]) Mar 29, 2019 6:09 AM
       feedback needed on this i (by plenty [MO]) Mar 29, 2019 6:11 AM
       feedback needed on this i (by Steve [TN]) Mar 29, 2019 6:16 AM
       feedback needed on this i (by redwoods [WV]) Mar 29, 2019 6:18 AM
       feedback needed on this i (by redwoods [WV]) Mar 29, 2019 6:23 AM
       feedback needed on this i (by NE [PA]) Mar 29, 2019 6:24 AM
       feedback needed on this i (by S i d [MO]) Mar 29, 2019 6:25 AM
       feedback needed on this i (by redwoods [WV]) Mar 29, 2019 6:26 AM
       feedback needed on this i (by plenty [MO]) Mar 29, 2019 6:47 AM
       feedback needed on this i (by redwoods [WV]) Mar 29, 2019 7:13 AM
       feedback needed on this i (by redwoods [WV]) Mar 29, 2019 7:15 AM
       feedback needed on this i (by plenty [MO]) Mar 29, 2019 7:30 AM
       feedback needed on this i (by S i d [MO]) Mar 29, 2019 7:38 AM
       feedback needed on this i (by redwoods [WV]) Mar 29, 2019 7:38 AM
       feedback needed on this i (by razorback_tim [AR]) Mar 29, 2019 7:39 AM
       feedback needed on this i (by MikeA [TX]) Mar 29, 2019 7:42 AM
       feedback needed on this i (by Robert J [CA]) Mar 29, 2019 7:45 AM
       feedback needed on this i (by plenty [MO]) Mar 29, 2019 7:53 AM
       feedback needed on this i (by redwoods [WV]) Mar 29, 2019 7:54 AM
       feedback needed on this i (by redwoods [WV]) Mar 29, 2019 8:08 AM
       feedback needed on this i (by JB [OR]) Mar 29, 2019 8:18 AM
       feedback needed on this i (by redwoods [WV]) Mar 29, 2019 8:26 AM
       feedback needed on this i (by Mike SWMO [MO]) Mar 29, 2019 8:27 AM
       feedback needed on this i (by redwoods [WV]) Mar 29, 2019 8:30 AM
       feedback needed on this i (by JB [OR]) Mar 29, 2019 8:36 AM
       feedback needed on this i (by redwoods [WV]) Mar 29, 2019 8:46 AM
       feedback needed on this i (by small potatoes [NY]) Mar 29, 2019 8:57 AM
       feedback needed on this i (by redwoods [WV]) Mar 29, 2019 9:17 AM
       feedback needed on this i (by redwoods [WV]) Mar 29, 2019 9:29 AM
       feedback needed on this i (by JB [OR]) Mar 29, 2019 9:40 AM
       feedback needed on this i (by redwoods [WV]) Mar 29, 2019 9:50 AM
       feedback needed on this i (by JB [OR]) Mar 29, 2019 9:56 AM
       feedback needed on this i (by redwoods [WV]) Mar 29, 2019 9:57 AM
       feedback needed on this i (by redwoods [WV]) Mar 29, 2019 10:00 AM
       feedback needed on this i (by LindaJ [NY]) Mar 29, 2019 10:10 AM
       feedback needed on this i (by redwoods [WV]) Mar 29, 2019 10:19 AM
       feedback needed on this i (by myob [GA]) Mar 29, 2019 11:33 AM
       feedback needed on this i (by Kurt [MI]) Apr 2, 2019 5:26 PM
       feedback needed on this i (by Pmh [TX]) Apr 3, 2019 3:39 PM

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feedback needed on this i (by redwoods [WV]) Posted on: Mar 29, 2019 5:38 AM
Message:

I woke up at 4am with this idea: instead of selling, how about if I just deed my 3houses to my manager friend, so houses will be under the name of his LCC, so I will be free of responsibility of the houses? He can do repairs and cleaning and rent them out and we split the profit?

Actually last week, he and his wife made an offer on my smallest house, and we agreed on a price of $9000. I paid$8k for it five years ago and had floors redone so$9k is fair price. They are going to apply for loan under his LCC to buy it, so sale depends on the loan. But they don't want to be too much in debt and want to start small.

If I sell the other three, I may just get 60 k, 50k or less, after paying the realtor commission etc.

What do you think of this idea?

--107.77.xxx.xx




feedback needed on this i (by NE [PA]) Posted on: Mar 29, 2019 5:40 AM
Message:

Deeding them is selling them. --50.107.xxx.xxx




feedback needed on this i (by redwoods [WV]) Posted on: Mar 29, 2019 5:50 AM
Message:

Hi NE,

The idea is, to sell them one house, and deed the other three to them without selling --107.77.xxx.xx




feedback needed on this i (by NE [PA]) Posted on: Mar 29, 2019 5:52 AM
Message:

You can't deed them the house without selling. That's my point. If the deed goes from your name to their name describing the property and the parcel and the township that it's in and everybody signs it, you just gave them the house. --50.107.xxx.xxx




feedback needed on this i (by NE [PA]) Posted on: Mar 29, 2019 5:53 AM
Message:

You can deed them to me and I will drive down and meet you. --50.107.xxx.xxx




feedback needed on this i (by redwoods [WV]) Posted on: Mar 29, 2019 5:55 AM
Message:

Right, that is what I meant, give them the other three. So he can start working on them to rent them out, and he and I can discuss how to split the profit.

--107.77.xxx.xx




feedback needed on this i (by redwoods [WV]) Posted on: Mar 29, 2019 5:59 AM
Message:

Well if you can manage them and make them into cash cows, and pay me too, I can deed them to you! --107.77.xxx.xx




feedback needed on this i (by Rick [IN]) Posted on: Mar 29, 2019 6:01 AM
Message:

Why do you want to do this? --73.102.xx.xx




feedback needed on this i (by redwoods [WV]) Posted on: Mar 29, 2019 6:04 AM
Message:

Because it is probably difficult to sell. I don't want the responsibility of owning them. --107.77.xxx.xx




feedback needed on this i (by redwoods [WV]) Posted on: Mar 29, 2019 6:09 AM
Message:

The longer they stay, the worse they will get. Currently, two of them are almost in rentable condition. The other two both need work... --107.77.xxx.xx




feedback needed on this i (by plenty [MO]) Posted on: Mar 29, 2019 6:11 AM
Message:

Just put your agreement as to who is doing what on paper in your operating LLc. Just leavevthem6in your name. Or add their nanes to the deed. You want to hold your position as an equity partner. So five years from now when they are worth five times as much you can profit or your kids can. --99.203.xx.xx




feedback needed on this i (by Steve [TN]) Posted on: Mar 29, 2019 6:16 AM
Message:

You are trying to avoid paying income tax. What you propose doing is considered a gift to recipient. Unless your properties are practically without market value, you will trigger a taxable event for the recipient. --68.156.xx.xx




feedback needed on this i (by redwoods [WV]) Posted on: Mar 29, 2019 6:18 AM
Message:

Hi plenty,

I don't have LLC. He does. I don't have kids either:)

I doubt the houses will be worth much more in five years. Thing is, I don't want to get sued, if something happens. He has LLC, which deters lawsuits, right? --107.77.xxx.xx




feedback needed on this i (by redwoods [WV]) Posted on: Mar 29, 2019 6:23 AM
Message:

Steve,

No, I am not trying to avoid income tax. They have been vacant for 3 or 4 years now, no income from them.

So they may refuse because of tax reason? I haven't thought about that... --107.77.xxx.xx




feedback needed on this i (by NE [PA]) Posted on: Mar 29, 2019 6:24 AM
Message:

I think you're asking for trouble here. --174.201.xx.xx




feedback needed on this i (by S i d [MO]) Posted on: Mar 29, 2019 6:25 AM
Message:

redwoods... Read the info at this link carefully, then talk to your CPA. I don't know why they lumped it under the link for small business, but it applies to anyone: private party or business.

irs.gov/businesses/small-businesses-self-employed/frequently-asked-questions-on-gift-taxes --173.20.xxx.xxx




feedback needed on this i (by redwoods [WV]) Posted on: Mar 29, 2019 6:26 AM
Message:

What kind of trouble, NE?

--107.77.xxx.xx




feedback needed on this i (by plenty [MO]) Posted on: Mar 29, 2019 6:47 AM
Message:

Your insurance should be considered, plus umbrella policy. It is my understanding that LLc may give you some protection. Others will come along with information on that. I would not just give them away. Hold your equity position. Could be a win win for all. Leave your equity to PBS or Church or to your partner. Noce of you can draw some monthly pocket money too! Spell out each persons person's responsibilities in your LLC operating agreement. You may need to create a new one. --99.203.xx.xx




feedback needed on this i (by redwoods [WV]) Posted on: Mar 29, 2019 7:13 AM
Message:

Hi Sid,

I tried your link but it doesn't open. I don't know how to get to the site on my small cell phone. Will try from my laptop later when the wifi works again.

Plenty, you just gave me a new idea: maybe he and I can get a new,joint LLC? I pitch in with my houses, he does the work?

What is the down side of that?

Yes, some pocket money each month sounds good:) --107.77.xxx.xx




feedback needed on this i (by redwoods [WV]) Posted on: Mar 29, 2019 7:15 AM
Message:

And it could be a win win for all! All, except the realtor:) --107.77.xxx.xx




feedback needed on this i (by plenty [MO]) Posted on: Mar 29, 2019 7:30 AM
Message:

One day it maybe a win for Realtor. Starting with a bew LLC buts both of you on more equal terms and position. Keep thinkin --99.203.xx.xx




feedback needed on this i (by S i d [MO]) Posted on: Mar 29, 2019 7:38 AM
Message:

redwoods.... The key issue is Gift Tax. When you give something of value (stocks, real estate, cash, bank account, etc) to someone for less than fair market value or for free, you are limited to $15,000 per calendar year. Anything over that, and you pay gift tax. it sounds like your "gift" will be significantly higher than that.

Btw, it doesn't matter what you call it: if it meets the definition I laid out above, the IRS calls it a gift.

Do a Google on "gift tax irs" and see what pops up.

Also, keep in mind that if you do decide to "give" this to your friend, they will inherit your basis in the property. This will impact their ability to use depreciation to offset income and also if they ever sell they will have to pay recapture and capital gains based on the value you paid, not what they paid since they didn't "pay" anything.

Even if you sell below FMV, the equity you didn't charge for is considered a gift. House is worth $60,000 and you "sell" it for $100? You just gave your buyer a $59,900 gift of equity.

Let's consider this deal from an entirely different perspective: What's your real GOAL with this transaction? Just don't want to own real estate but want still want to get rents? Tell us what you're really trying to accomplish with this scenario and we can probably find a way to make it happen. --173.20.xxx.xxx




feedback needed on this i (by redwoods [WV]) Posted on: Mar 29, 2019 7:38 AM
Message:

Yes, I will keep thinking... One thought is, if it is a success, then all is well. But what if it failed? I guess we can always sell then:)

So, no downside?

Is it possible for two unrelated people to have a LLC together? --107.77.xxx.xx




feedback needed on this i (by razorback_tim [AR]) Posted on: Mar 29, 2019 7:39 AM
Message:

Instead of giving them to your managers LLC with only a promise of splitting profits somehow (which said promise may or may not be fulfilled), sell them to the LLC and carry the note. Then you have a promissory note providing monthly cash flow and a mortgage securing your interest. If he doesn’t pay you can foreclose. Be the bank.

IMO just deeding them to the LLC as you have proposed is a bad idea unless you are willing to walk away with nothing. --166.137.xxx.xx




feedback needed on this i (by MikeA [TX]) Posted on: Mar 29, 2019 7:42 AM
Message:

I think a joint LLC is a better idea. You need to work out the terms with him and write them down, I would suggest you seek the guidance of an attorney to help define it.

50/50 is way too generous with you providing all the equity in the houses unless the houses need lots of work to get them rent ready which he will provide. Think in terms of it this way: how many $ would it take a contractor to get them rent ready (he provides), how much are the houses worth now (you provide), how much is his yearly management fee (he provides). Add those together and you will get a starting point for the income split. That will give you a starting place to negotiate the terms with him. My guess is he will want a little more than this so he can build his own nest egg over time.

The other option would be that you sell it to him and you carry the note. That way he doesn't have to go to the bank, and you get the mortgage check over time. If you want to make it appealing to him, sell them for what you would clear after paying realtors fees, he gets a good price, you still get the same amount. --50.26.xx.xxx




feedback needed on this i (by Robert J [CA]) Posted on: Mar 29, 2019 7:45 AM
Message:

Once you deed your properties away, you're claim to ownership, equity and value are gone. And you may still have liability towards your current tenants with regards to the lease, deposits and/or any rents received for the current month. How do you "know" that the new owner will honor our contractual responsibility? You don't. You must have a sales contract, hand over any deposits held and distance yourself from any responsibilities. End the contracts for your gardener, utilities, property taxes, etc.

I once sold a property to a "friend" that never paid the property taxes. After 5 years the County came after me for the back taxes. I had done everything right. My "friend" had filed false papers saying the deal didn't go through. Mistakes can happen. --47.156.xx.xx




feedback needed on this i (by plenty [MO]) Posted on: Mar 29, 2019 7:53 AM
Message:

Yes you can have LLC with people you are not related to. They work well for this purpose. Its not gift. Dont worry about gift tax. Thisvis business arrangement. --99.203.xx.xx




feedback needed on this i (by redwoods [WV]) Posted on: Mar 29, 2019 7:54 AM
Message:

Thank you, Sid,

Good last question. What do I want...

1.I want to not lose money, or not lose too much.

2. I want to be free of responsibilities of owning.

If someone offers me 70k for all, I will sell. But not the auctioneer's estimate of 30k. But my houses, people who are interested in buying, can't afford. Those who can afford, they usually buy elsewhere.

Plus, some of my houses have problems, like, one has 30 steps to climb to the door, with only street parking. One has a garage apartment on top that also requires climbing. Two needs new roofs, and one needs a major renovation...

There are good things about my houses, too. So, it's a mixed bag...

--107.77.xxx.xx




feedback needed on this i (by redwoods [WV]) Posted on: Mar 29, 2019 8:08 AM
Message:

Tim, they don't want to buy them all, they want to start small,one a time, like I mentioned before. Of course I want to sell all and carry a note, but it's not up to me alone...

Mike, good points and I will think about them.

Robert, no tenants for years, so no issue with what you mentioned.

Ok, plenty, so a joint LLC may work, just need to work out the terms, like Mike said...

BTW, my manager doesn't know this idea yet. I want to see the pro and cons before I share with him. --107.77.xxx.xx




feedback needed on this i (by JB [OR]) Posted on: Mar 29, 2019 8:18 AM
Message:

redwoods, I think you may be asking a lot of your friends. They may think that one is doable, but if you drop four properties on them and say rent them out to good people they may quickly be overwhelmed. Especially if they need to do some work before they can be rented. --24.20.xxx.xxx




feedback needed on this i (by redwoods [WV]) Posted on: Mar 29, 2019 8:26 AM
Message:

JB, you make good sense. Should I ask him? He has a government job that allows him a lot of free time, plus he will retire with good government pension, in a few years. He is 46.

He and the realtor haven't signed my for sale contract yet, but any time now, or soon.

Would you share this idea with him before my houses are assigned to the realtor? --107.77.xx.xx




feedback needed on this i (by Mike SWMO [MO]) Posted on: Mar 29, 2019 8:27 AM
Message:

SID said “The key issue is Gift Tax. When you give something of value (stocks, real estate, cash, bank account, etc) to someone for less than fair market value or for free, you are limited to $15,000 per calendar year”

I believe that is:

That is $15,000 per calendar year PER PERSON

So give $15,000 to him and $15,000 to his wife if that helps

Thats how it was about 4 years back --173.187.xxx.xx




feedback needed on this i (by redwoods [WV]) Posted on: Mar 29, 2019 8:30 AM
Message:

Mike, thanks but there is new development now, as shown by the more recent posts, --107.77.xxx.xx




feedback needed on this i (by JB [OR]) Posted on: Mar 29, 2019 8:36 AM
Message:

By all means, talk to your friend first. Find out if it's something he may be interested in. Then if he is, you can discuss the situation with a competent RE attorney and have him draw up a contract that will work for both of you. --24.20.xxx.xxx




feedback needed on this i (by redwoods [WV]) Posted on: Mar 29, 2019 8:46 AM
Message:

Or, would it be better to put them on the market for sale first, and if no buyer after 6 months, then try the joint venture with him? Or should I ask his feedback on this when question? --107.77.xx.xx




feedback needed on this i (by small potatoes [NY]) Posted on: Mar 29, 2019 8:57 AM
Message:

I don't see why you are so worried about a lawsuit, unless there is some hazard you are not mentioning and then you are liable for negligence, so make them safe to begin with.

You mention 2 buildings are almost rentable and 2 are dogs so to speak. Have you and your potential partner discussed what level of funds it would take to make them each move in ready? Seems like you are trying to pawn off responsibility for things and still reap the rewards. He will become frustrated that he is pouring money down a pit and your partnership will fall apart. If a building is only worth 9K and you have to put that much in, is it worth it? Prolly not for resale. Then the Q is how long will it take him to make his money back and pay you your cut? Have you had a conversation like that? --24.194.xx.xx




feedback needed on this i (by redwoods [WV]) Posted on: Mar 29, 2019 9:17 AM
Message:

Hi small,

The steps I wrote about earlier are my only concern. Trip and fall. Snow and rain too much in WV. One house has 30 some steps to get in. One unit has about 15 steps. 3 houses have only street parking.

Also, my town doesn't have a good tenant pool. Everyone has bad credit, if they even have a credit, lol. --107.77.xxx.xx




feedback needed on this i (by redwoods [WV]) Posted on: Mar 29, 2019 9:29 AM
Message:

And oh, I have not shared this idea with him yet...

Also I don't know which is better for me: to put houses on the market for 6 months to see if they can be sold? If not, joint venture with him? Or do it now? --107.77.xxx.xx




feedback needed on this i (by JB [OR]) Posted on: Mar 29, 2019 9:40 AM
Message:

If you don't at least check with him first, he may decide he doesn't want to work with you at all regarding this. It only seems right to give him first crack at it, right? --24.20.xxx.xxx




feedback needed on this i (by redwoods [WV]) Posted on: Mar 29, 2019 9:50 AM
Message:

Of course you are right, JB.

But, would this affect his decision to buy my smallest house? We don't have a sale contract yet. We just talked on the phone and texted. And then decided to put the other 3 on the market...

I just wrote a text to him and saved it, haven't sent it yet... --107.77.xxx.xx




feedback needed on this i (by JB [OR]) Posted on: Mar 29, 2019 9:56 AM
Message:

I don't know. It sounds like you really need to have a long chat with him and maybe together you can come up with a plan that seems to work for both of you. After that, speak with that RE attorney I mentioned earlier and have him draw up a contract.

ps. Maybe he just buys the little one from you. Know way to know what he might want until you thoroughly discuss it with him. --24.20.xxx.xxx




feedback needed on this i (by redwoods [WV]) Posted on: Mar 29, 2019 9:57 AM
Message:

On the bright side, neither he nor I need the rent money for livelihood, since we both have other income to live on. It's a good thing, right? --107.77.xxx.xxx




feedback needed on this i (by redwoods [WV]) Posted on: Mar 29, 2019 10:00 AM
Message:

Yes JB. I will send him the text and see what he thinks.

Thank you all! --107.77.xxx.xxx




feedback needed on this i (by LindaJ [NY]) Posted on: Mar 29, 2019 10:10 AM
Message:

We have some unwritten rules we keep throwing around..

Never rent to friends or family

Never loan money to friends or family

Unless you have a written agreement as to what the future investment and profits are to be divided, you can not count on getting any of it.

Why don't you sell it to him with payments years from now when things are hopefully profitable for him? or sell him all for xxx dollars. Even if you sell for $60K, $50k or less and walk away, whatever you get minus commission etc, is yours, now!

--108.4.xxx.xx




feedback needed on this i (by redwoods [WV]) Posted on: Mar 29, 2019 10:19 AM
Message:

Linda, we discussed that earlier. They wanted to start small. They made an offer only on one house, and need to get a bank loan on that. --107.77.xxx.xxx




feedback needed on this i (by myob [GA]) Posted on: Mar 29, 2019 11:33 AM
Message:

Redwoods this almost came out of my mouth-- GEE I wish I lived in WV so I could take these? Then I slapped myself-- put a 5 inch needle into my inner thigh and SAW THE LIGHT. --99.103.xxx.xxx




feedback needed on this i (by Kurt [MI]) Posted on: Apr 2, 2019 5:26 PM
Message:

You can't give people assets and avoid tax liabilities. To be clear, you can give anyone anything, but you'd have to pay substantial taxes on your gift. You could use some of your estate tax exemption credits in the gift if you wanted to do that. But you must pay tax.

Don't participate in tax evasion. --107.5.xxx.xx




feedback needed on this i (by Pmh [TX]) Posted on: Apr 3, 2019 3:39 PM
Message:

If they need to borrow to buy a property for $9,000 I doubt they have tha acumen to run the others. and they have been vacant for years. how will they change that. put them up for sale cash price & be done. --104.218.xxx.xx



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