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Originally posted by carnutzzz
You would not finance through the LLC- LLC's don't have credit, you do. You would secure financing yourself, then transfer the title of the property to the LLC.
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That's not necessarily true. You can have a big company that's an LLC.
Quote:
Originally posted by carnutzzz
Yes- professional advice is necessary before going too far.
Wil you avoid taxes? Depends- but not really.
Think about it- you rent it out for $1k a month x 12 months. That's another $12k in income for you for the year- that hasn't been taxed yet! Sure, you'll create expenses to offset that, but this isn't exactly the holy grail of tax-free income.
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Tax codes have been implemented to cut down on this stuff by people trying to shield income with appreciating property - best of both worlds, eh?
Carnutzz is correct. The real way to generate that loss that you can use against your income is to depreciate the property (in the tax sense) over the 27.5 years allowed. Guess what happens when you try to sell, major gain! Thus you have to buy another investment property (or some other business asset) in a 1031 like kind exchange. (There are people that actually link people up looking to make these kinds of trades). You pay taxes on any of the gain your realize in cash (ie. not a straight trade).
This is the reason there are a lot of old ladies sitting on renatl properties, if they sell them, they are in a world of hurt tax wise.
I can't comment on having a bunch of LLC's. Sounds like some of these RE books' nonsense, but it may be different in your state. When I was renting out we attended a seminar. The Atty that put it on recommended owning in your name. You could own up to four. Then your spouse could own four in her name, etc.