I have two question about this structure. If two LLC own a rental property with TIC agreement how do payments/cost work, one shared bank account(don't know if this is possible) or two separate accounts? If they are separate accounts should everything flow though one LLC bank account to keep track of things and then just pay the other LLC their portion at the end of the year? Second question is about loan for the rental property: Will each LLC need to secure a separate loan for the property or can they get a joint loan? Love the videos keep up the good work!
Thank you, Clint, for this education and for confirming my understanding of TIC. I bought a 4-bedroom townhouse for residential use in late 2016 for the purpose that saving money buying a TIC Home than renting. The deed is TIC owned by a single man his name and a single woman my name 50/50 ownership. the mortgage, HOA, and utilities except for phone and internet. The size house of the house is 1,540 sqft 4 bedrooms and 2 baths upstairs and a powder room downstairs, with a lot, is 1742 sq ft. all bedrooms upstairs. Downstairs is a common area with a kitchen, living, family room, and laundry. He occupied half of the upstairs two bedrooms and a bathroom in the hallway with a closet. I occupied the other half. The master bedroom and other small room the bathroom is inside. He and his family ruin their areas, with molded bathtub and molded refrigerator neglected. I maintained my area nicely, I bought my own refrigerator and I took care of the front and backyard cutting grass and gardening and nice furniture and 8X8 rugs, he only has clothes and pots. I know TIC each owner can sell their own share or whatever they want to give it to. He wants to sell the house I told him you can sell you, I don't sell mine it's my home. He hires a lawyer I have a trial This April 2023 . He is suing me if I don't buy his share he asked the Judge for a forced sale. I don't want to buy his damaged home at a high price, and the second point is not good timing to buy at a high rate. I am representing myself, I answered the summons and the interrogatories. with text that I told him to sell his share and how to sale. And we have a voluntary partition agreement that what he occupied is his share and what I occupied is my share and downstairs is a common area. I got an email from his lawyer yesterday telling me to buy his share and will stop everything he will not sue me. I firmly believe that I have the right to keep my share and he can eat his share that is the reason I choose to have TIC because of the freedom to do and not to do each other share. I certainly appreciated it if you have any comments. I will not take it as legal advice it will give me more strength.
Yes this is a potential problem with a TIC. The action he is bringing is referred to as an equitable partition action to force the sale of the property. The judge could ordered it sold if he believes the property can not be equitably divided.
Great vid, here's a question for you Clint: Let's say I have an EXISTING LLC with a few rental properties already in it. Can I use THAT LLC to enter into a JV / TIC arrangement with my partner's LLC? Or should I create a NEW LLC specifically to be used for this JV project?
Clint, this video is so clear and helpful! Thank you! Just discovered your channel today, and you have a new subscriber here. 🙋♀️ I wonder if you might have some advice for me. I am currently renting friend’s guest house on her 8 acre property in CA. I want to buy the guest house and a couple of acres, and she is amenable to selling it to me. The problem is that there is a road that divides her property, her house is on one side and I’m on the other, and (I don’t really know all the reasons why, but…) she is not legally able to parcel off the land with the guest house to sell it to me. I would like to propose a TIC solution (maybe 25/75, 30/70…whatever seems fair to both of us) and was thinking that I would involve my estate planner and put my share of the property in my trust. From your video, it seems that it would be wise for us to first set up separate LLCs before I purchase the property (assuming that she’s not averse to the TIC arrangement). Do you have any suggestions on how I might present this idea to her? I just started reading through some of the comments here, but thought you might be able to suggest something to head off some potential red flags. Thanks again for the great content! I’m going to dig into your other videos and see what else I can learn. 😊
Given this will be your residence, I would not use an LLC. A TIC could work, but you would be entitled to X% of the whole property, so you would want to put into the agreement that you only own a specific portion. Also, it will probably make it difficult for either of you to sell or finance.
Great content. My question : Can this strategy be apply if you are doing a Buy & hold property with no renovations with the intention of acquisition ? Having a exit strategy of refinancing within 12-24 months
Quick Question? As an agent or middle man. How to I lock down land with an owner and sell a custom home to an end buyer and make a profit? A listing is only good for 6 months. I thought about a lease option but how to I improve on the property with the buyers money and not get screwed over by the seller? And in owners finance ill have to pay closing cost so I don’t think that wouldn’t be it. Any Ideas?
What happens if I follow your advise but I want to do a cash out refinance 6 months later? Can we get a loan on a property that is owned by two LLC’s ?
Clint, how would the entities differ if you engaged in a similar partnership, but geared towards flips using a hard money lender? I know you already stated in previous videos that we should set up a corporation as a managing entity for flipping (I believe then we would set up an LLC to purchase the property, and filter the proceeds to the corporation afterwards). Would we still 1) start our own corp and then 2) each set up our own LLC to purchase a flip at 50/50 ownership?
Excellent question. If you think you will be several flips with this one partner then consider having each of your corporations own an interest in a JV LLC (this entity fill file a tax return and pass the income to each of your corporations). The JV LLC will hold each of the special purpose LLCs you set up for the individual flips. When a deal is complete you dissolve the special purpose LLC but not the JV LLC. The reason for my recommendation is to cut down on the number of tax returns you will need to file. The special purpose LLCs will be set up as disregarded entities (no tax return) but the JV LLC is a partnership (tax return). If you decided to forgo the JV LLC then each of your deals with your partner will need a separate tax return filed and that could get $$$.
Clint, I set up my corporation in California, where I reside (full disclosure, I’m a real estate agent). My partner on the flipping venture(s) just finished setting up their corporation (W2 employee, not a real estate professional). They also set it up in California, where they reside. We are now about to form our JV LLC, strictly for flips. Since we formed each of our corps in CA, and are flipping in CA, should we just set up our JV LLC in CA also, or would it be more beneficial to set up a Wyoming JV LLC. The LLC will be owned 50/50 by each of our corporations.
In CA I would not flip through an LLC if you expect the gross sales price to exceed 1MM. You will pay more in franchise tax. I prefer to use a limited partnership big flips in CA.
I am selling a house and have a couple interested (boyfriend and girlfriend). The guy is still married and their realtor send me their offer with both as buyers and next it says Join Venture UMQ. The realtor told them that even if he is married the wife won't have any interest in the property because they are buying it as an investment (but they will be living in it). They are getting private financing so it really doesn't affect me but I am curious to know if what the realtor mentioned is possible.
Not sure. This would depend on state law. I think it is risky without an attorney signing off that the soon to be ex will not have an interest in the asset.
Great video Clint, good information. I actually got a chance to hear you speak at Tarl Yarber’s PNW Big Badass Real Estate Wealth Expo. Would an umbrella policy along with the TIC be a good idea if you don’t have an LLC?
@@ClintCoons thanks for the quick response. I’m searching through your videos. Do you have anything on silent money partner and how to protect yourself as one?
Hi I have a question and would appreciate some guidance. I am buying a car wash along with a partner. My partner needs to use cost segregation and bonus depreciation tax benefits for 2021. I need those for 2022. I think we should make the partnership as Tenants in common to facilitate different bonus depreciation tax years among the two of us. Does that sound right? Thank you
Who will manage, use of the property, paying expenses, transfer of interest restrictions, how and when the property will be sold and how is the price determined, buyout rights, owner default on obligation under TIC agreement, profit sharing and loss, are some of he areas that should be addressed.
Thank you for the educational video! I wasn’t even thinking ahead to consider tax planning scenarios! This is invaluable information.
Glad it was helpful!
Thank you sir I’m currently doing a 1031 Exchange and partnering up with an Investor
Just what I needed I am about to do this
Nice
I have two question about this structure. If two LLC own a rental property with TIC agreement how do payments/cost work, one shared bank account(don't know if this is possible) or two separate accounts? If they are separate accounts should everything flow though one LLC bank account to keep track of things and then just pay the other LLC their portion at the end of the year? Second question is about loan for the rental property: Will each LLC need to secure a separate loan for the property or can they get a joint loan?
Love the videos keep up the good work!
Omg! Awesome educational video, Clint! So much clarity! Thank you so much!
Glad you enjoyed it!
Really great; thank you!
You're very welcome!
Clint you just answered a question I had in my mind for awhile now, Thank you so much!
Happy to help!
Thank you, Clint, for this education and for confirming my understanding of TIC. I bought a 4-bedroom townhouse for residential use in late 2016 for the purpose that saving money buying a TIC Home than renting. The deed is TIC owned by a single man his name and a single woman my name 50/50 ownership. the mortgage, HOA, and utilities except for phone and internet. The size house of the house is 1,540 sqft 4 bedrooms and 2 baths upstairs and a powder room downstairs, with a lot, is 1742 sq ft. all bedrooms upstairs. Downstairs is a common area with a kitchen, living, family room, and laundry. He occupied half of the upstairs two bedrooms and a bathroom in the hallway with a closet. I occupied the other half. The master bedroom and other small room the bathroom is inside. He and his family ruin their areas, with molded bathtub and molded refrigerator neglected. I maintained my area nicely, I bought my own refrigerator and I took care of the front and backyard cutting grass and gardening and nice furniture and 8X8 rugs, he only has clothes and pots. I know TIC each owner can sell their own share or whatever they want to give it to. He wants to sell the house I told him you can sell you, I don't sell mine it's my home. He hires a lawyer I have a trial This April 2023 . He is suing me if I don't buy his share he asked the Judge for a forced sale. I don't want to buy his damaged home at a high price, and the second point is not good timing to buy at a high rate. I am representing myself, I answered the summons and the interrogatories. with text that I told him to sell his share and how to sale. And we have a voluntary partition agreement that what he occupied is his share and what I occupied is my share and downstairs is a common area. I got an email from his lawyer yesterday telling me to buy his share and will stop everything he will not sue me. I firmly believe that I have the right to keep my share and he can eat his share that is the reason I choose to have TIC because of the freedom to do and not to do each other share. I certainly appreciated it if you have any comments. I will not take it as legal advice it will give me more strength.
Yes this is a potential problem with a TIC. The action he is bringing is referred to as an equitable partition action to force the sale of the property. The judge could ordered it sold if he believes the property can not be equitably divided.
Excellent video!
Thank you very much!
Good one, thanks.
You're welcome!
Your a genus sir!
Wow, thanks!
Great vid, here's a question for you Clint: Let's say I have an EXISTING LLC with a few rental properties already in it. Can I use THAT LLC to enter into a JV / TIC arrangement with my partner's LLC? Or should I create a NEW LLC specifically to be used for this JV project?
I think you already know my answer but yes create a new LLC. :)
great work. most equitable perspectives on the net!
Thanks
Clint, this video is so clear and helpful! Thank you! Just discovered your channel today, and you have a new subscriber here. 🙋♀️
I wonder if you might have some advice for me. I am currently renting friend’s guest house on her 8 acre property in CA. I want to buy the guest house and a couple of acres, and she is amenable to selling it to me. The problem is that there is a road that divides her property, her house is on one side and I’m on the other, and (I don’t really know all the reasons why, but…) she is not legally able to parcel off the land with the guest house to sell it to me. I would like to propose a TIC solution (maybe 25/75, 30/70…whatever seems fair to both of us) and was thinking that I would involve my estate planner and put my share of the property in my trust. From your video, it seems that it would be wise for us to first set up separate LLCs before I purchase the property (assuming that she’s not averse to the TIC arrangement). Do you have any suggestions on how I might present this idea to her? I just started reading through some of the comments here, but thought you might be able to suggest something to head off some potential red flags. Thanks again for the great content! I’m going to dig into your other videos and see what else I can learn. 😊
Given this will be your residence, I would not use an LLC. A TIC could work, but you would be entitled to X% of the whole property, so you would want to put into the agreement that you only own a specific portion. Also, it will probably make it difficult for either of you to sell or finance.
Thanks for the reply. Definitely a more nuanced situation, but I’m going to initiate the conversation with her to see what she thinks. Thanks again!
The rich stay rich by spending less and Investing more while the poor stay poor by spending more but with no investment
Great content. My question : Can this strategy be apply if you are doing a Buy & hold property with no renovations with the intention of acquisition ? Having a exit strategy of refinancing within 12-24 months
You could use it many ways. If you plan to hold the property maybe an JV LLC is the best option.
Quick Question? As an agent or middle man. How to I lock down land with an owner and sell a custom home to an end buyer and make a profit?
A listing is only good for 6 months. I thought about a lease option but how to I improve on the property with the buyers money and not get screwed over by the seller? And in owners finance ill have to pay closing cost so I don’t think that wouldn’t be it. Any Ideas?
Possibly use a land contract
@@ClintCoons I’ll look into that. Thank you
What happens if I follow your advise but I want to do a cash out refinance 6 months later? Can we get a loan on a property that is owned by two LLC’s ?
Not if you are using a QM lender. If you work with a non QM lender e.g., community bank, then yes it is possible.
Clint, how would the entities differ if you engaged in a similar partnership, but geared towards flips using a hard money lender? I know you already stated in previous videos that we should set up a corporation as a managing entity for flipping (I believe then we would set up an LLC to purchase the property, and filter the proceeds to the corporation afterwards).
Would we still 1) start our own corp and then 2) each set up our own LLC to purchase a flip at 50/50 ownership?
Excellent question. If you think you will be several flips with this one partner then consider having each of your corporations own an interest in a JV LLC (this entity fill file a tax return and pass the income to each of your corporations). The JV LLC will hold each of the special purpose LLCs you set up for the individual flips. When a deal is complete you dissolve the special purpose LLC but not the JV LLC. The reason for my recommendation is to cut down on the number of tax returns you will need to file. The special purpose LLCs will be set up as disregarded entities (no tax return) but the JV LLC is a partnership (tax return). If you decided to forgo the JV LLC then each of your deals with your partner will need a separate tax return filed and that could get $$$.
@@ClintCoons Wow, completely thorough explanation! Thank you for replying so quickly, Clint.
Clint, I set up my corporation in California, where I reside (full disclosure, I’m a real estate agent).
My partner on the flipping venture(s) just finished setting up their corporation (W2 employee, not a real estate professional). They also set it up in California, where they reside.
We are now about to form our JV LLC, strictly for flips.
Since we formed each of our corps in CA, and are flipping in CA, should we just set up our JV LLC in CA also, or would it be more beneficial to set up a Wyoming JV LLC. The LLC will be owned 50/50 by each of our corporations.
In CA I would not flip through an LLC if you expect the gross sales price to exceed 1MM. You will pay more in franchise tax. I prefer to use a limited partnership big flips in CA.
@@ClintCoons Well that throws a monkey wrench into my plans, time to research LP formation. Thanks for responding.
I am selling a house and have a couple interested (boyfriend and girlfriend). The guy is still married and their realtor send me their offer with both as buyers and next it says Join Venture UMQ. The realtor told them that even if he is married the wife won't have any interest in the property because they are buying it as an investment (but they will be living in it). They are getting private financing so it really doesn't affect me but I am curious to know if what the realtor mentioned is possible.
Not sure. This would depend on state law. I think it is risky without an attorney signing off that the soon to be ex will not have an interest in the asset.
Great video Clint, good information. I actually got a chance to hear you speak at Tarl Yarber’s PNW Big Badass Real Estate Wealth Expo.
Would an umbrella policy along with the TIC be a good idea if you don’t have an LLC?
Absolutely
@@ClintCoons thanks for the quick response. I’m searching through your videos. Do you have anything on silent money partner and how to protect yourself as one?
@@Ayee_Jayyy I do not but I would lend the money out of an LLC. The LLC will take a secured interest in the investment.
@@ClintCoons Thank you so much!!
Hi
I have a question and would appreciate some guidance.
I am buying a car wash along with a partner. My partner needs to use cost segregation and bonus depreciation tax benefits for 2021.
I need those for 2022.
I think we should make the partnership as Tenants in common to facilitate different bonus depreciation tax years among the two of us.
Does that sound right?
Thank you
Sure. Use cost seg and if you have losses you can not use in 2021 then you portion of the loss will carry forward.
What if you already have ownership as an LLC with each partner as 50% owner? Can you change it the 2 LLCs with a TIC Agreement after the fact?
Yes but you first need to verify there will not be a transfer tax or property reassessment when changing the ownership from a JV LLC into a TIC.
Love it
Lucy Yang 德州地产投资
Thanks for watching.
What limitations should/ can be included in the TIC?
Who will manage, use of the property, paying expenses, transfer of interest restrictions, how and when the property will be sold and how is the price determined, buyout rights, owner default on obligation under TIC agreement, profit sharing and loss, are some of he areas that should be addressed.
Can this be done with 2 peope in Tenents in entirety?
Tenants in common.
Lol kinda turned it into a soap opera😂.