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earlyretirement
Participant[quote=spdrun]Once you go 5+ units or commercial, getting mortgage/insurance with corporate ownership becomes a LOT easier.[/quote]
Yes, by all means, my advice and experience above was only on buying a SFH. I’m sure once you own many properties it’s a totally different situation.
spdrun, just out of curiosity, do you structure each of your purchases under a separate LLC, or all under one master LLC, or do you just own all of them under your name?
Participant[quote=timtoomey]It would be great to establish an LLC for the sake of privacy and to shelter assets. I appreciate the comments and questions raised especially how an LLC can affect insurance and future loans. I am interested in estate planning and would appreciate any sources I should consult. NOLO is where I am planning to start. Thanks![/quote]
Yes, as UCGal mentioned, I went this route. I researched a while before doing it. You can start out and read a few articles on this website which I found helpful.
http://www.limitliability.com/llcslivingtrustsarticles.html
There are many reasons why you might want to structure this under an LLC. Several reasons were already mentioned. There are many out there and each person has a different reason for doing it. It can be good old fashion privacy, to asset protection, to tax reasons if you have residency in multiple countries. (Some countries have a worldwide asset tax on PERSONAL assets but none for corporate assets.
What might make sense for one person won’t for another. And there is a LOT of misinformation or varying information out there about LLC and home ownership. So odds are you will find different information from State to State.
I posted a lot of information about this process in another post on Piggington if you want to do a search you can probably find it.
In a nutshell, I found the best way to structure it IF you are going to go ahead and buy under an LLC is to set up the company ahead of time so the house can go into the name of the LLC directly upon the initial purchase. This way you don’t have to transfer the name later which to me kind of defeats the purpose of privacy.
And the best State I found to set it up in was a Delaware LLC which offers the most privacy. They never disclose anywhere the officers/owners of the LLC like other states. Plus the fee to maintain it is very affordable. I pay $250/year to Delaware for the LLC and $100 a year to a law firm in Delaware to be my Registered Agent on record and they pay this tax for me each year and I turn around and pay them this $350/year.
The most difficult part was finding an insurance company that had a clue how to legally structure the insurance. I found most had no clue. Especially the major insurance companies. And even with the SAME insurance company and different offices in San Diego I would get conflicting information or quotes that were FAR apart.
The way I had to structure it was getting the main policy under the name of the LLC and then I had to get a separate rental policy under my wife and I’s name. I went ahead and also got an Umbrella coverage policy with the same company under my personal name.
In the end, everything worked perfectly. The only thing I’d mention is that the City of San Diego will automatically assume you are renting it and not living in it when they see an LLC and they will send you a bill for taxes resulting from renting it out. But all you have to do is send in a letter along with utility bills and they also want to see the Articles of Incorporation and then they just get you out of the system to pay rental taxes.
[quote=gzz]
I don’t think you even want to consider this unless there is no mortage, no chance of getting one later or HELOC. It seems to be the thing to do for very rich people who want to hide assets and maximize privacy.[/quote]There was no easy way to get a mortgage for an LLC. Most people putting properties under an LLC are buying with cash. In all my due diligence I didn’t come across anyone that was able to get a mortgage for their LLC.
And gzz makes a great point that if you plan on HELOC’ing the house in the future this probably isn’t the way to go. I was looking to buy a 2nd property in Carmel Valley and went through the pre-approval process. I easily got pre-approved but the guy kept trying to get me to use the paid off house for a loan. I wasn’t interested but out of curiosity I heard him out on the process involved if you wanted to do that.
It sounded like I would have had to transfer the house from the LLC to my own name and then I could borrow against it. I had no interest in doing that. So gzz is correct that it’s not easy to HELOC out of an LLC property from what it sounds like.
People don’t necessary do this to “hide assets”. It’s just if you have lots of assets, it’s better for you to shelter these assets so they aren’t in your name for a vast number of reasons.
Just go to any airport, marina, etc. You will find that many wealthy people own their Yachts, airplanes, private jets, etc. all under the name of a Delaware LLC for the most part. When you see corporate executives that own their own jets (think Google CEO’s) in almost every case you will see a Delaware LLC was set up as the entity/structure that owns it.
February 28, 2013 at 10:49 PM in reply to: Costco Aetna Health Insurance now available in CA #760244ParticipantThanks so much BG. I will check out that option you mentioned. Appreciate the advice.
ParticipantI was just thinking about what other options are out there for healthcare coverage. I signed up with Kaiser Permanente 2 years ago. I own my own company so I self-insure my family. Prior to that I lived abroad and bought private medical insurance that was amazing! Expensive but really great and rivals anything I’ve had in the USA.
As with others, they keep raising the prices each year. We have a plan which covers my wife and I and our two kids. Keep in mind my wife and I are still fairly young and our kids are just 3 and 4. We pay almost $1,600 a month now for coverage.
When we first got it I thought they were pretty good. I liked the technology aspect of Kaiser where you take a blood test and you get emails instantly as each result comes back. It keeps track of all your prescriptions and you can order online. All your physical information is all online. Heck, you can even email with your doctor with them responding fairly quickly.
What I found about Kaiser is they are GREAT for preventative type stuff. Free immunizations for the kids. Free annual physicals, etc. But if you have any more serious type issue or have to get referred to a specialist they kind of drag their feet.
Plus when our kids are sick (nothing serious but just fever, flu, etc) they almost never can see their own physician who is really great. We almost always either get stuck seeing a nurse or some other random doctor as their doctor never can get them in besides annual exams, etc.
I’m lucky as though it’s a small world, my primary care physician just happens to live down the street from me in the same development. So if I need anything he always gets back to me quickly.
We are young and healthy and mainly got it because we have young kids, and we plan on maybe having more kids and there weren’t a whole lot of options out there. $1,600 a month ($19,000 a year) is quite a bit to pay for mediocre medical coverage.
It just doesn’t seem like there are too many great options for individual coverage if you self-insure.
Does anyone else have any good options besides this Costco that they can recommend based on personal experience?
ParticipantBG.
Oh NO doubt these kinds of shenanigans have been going on a while. But at least during the depths of the Great Recession you didn’t see them so aggressive like now. And there was not really this sense of urgency by these people that not so long ago recently defaulted to buy a “new home”. And I guess since there is not much pre-existing inventory in many cities the new stuff is their only route to home ownership again.
And now the builders are eating their cake too. They’ve been able to strip out many of the upgrades and people are paying more than ever to get all these “upgrades” where during the bubble it seemed like they almost had to include many of them. They are charging them a fortune. I’m not sure if you saw that Wall Street Journal a few weeks ago about people spending hundreds of thousands of dollars in upgrades. I believe they used one couple in Irvine as an example.
The more things change the more they stay the same……
Participant[quote=FormerSanDiegan][quote=earlyretirement]Yep. You can’t keep printing endless supplies of money with NO consequences. It can last for a little while but there WILL be a day of reckoning and you just have to be prepared for it.[/quote]
There will be a day of reckoning. The real quesiotn is how long until that day comes and will it matter to me.
Consider the Japan example…
Suppose you were a bright, intelligent 45-year-old, there when their interest rate dropped below 1%. You know that Japan can’t keep the rate near zero forever, so you start positioning for the eventually consequences.Rates dropped below 1% in Japan in 1995.
That person that was 45-years old when rates dropped below 1% is still waiting … and they are now age 62. They would have spend nearly the second half of their career in a less than 1% interest rate climate.
SO, while I believe that one should have some hedges against scenarios where rates turn around, inflation runs rampant, one should also be prepared for those things to not happen in a time-scale of their productive lifetime.[/quote]
Exactly right FSD. We live in interesting and difficult to predict times. Absolutely NO ONE knows when that day will come. Lots of experts try to pretend like they know but the truth is no one knows.
The Fed can artificially keep interest rates low for quite a while, further punishing savers and retirees. I mean let’s face it….we’ll probably be stuck in a very low interest rate environment probably until at least 2015.
I guess that’s why you just have to stay well diversified in different “baskets”. But very difficult to predict what will happen and when. Like I said…we live in very interesting times.
Participant[quote=sdduuuude]So, if you count girlfriends as part of “the cost of living” then yes – the cost of living is, indeed, lower ? ;)[/quote]
Ha, ha. So true! Although I imagine some of these guys might be spending more on their “girlfriends” abroad than they would in the USA. Or then again, not too many hot 21 year olds are going to be hanging around too many 65+ year olds in the USA unless you paid them. And even then they would probably not hang out with you for more than a few hours at a time.
I literally know many guys that are older and have young hot girlfriends. They claim not to pay them at all but the girls do get to live rent free in their places with free room and board.
I imagine it probably started out as a provider/client type relationship but hey…who am I to judge. I don’t judge them and they are having the time of their lives. LOL. And the crazy thing is a few of them even married their young girlfriends and their relationships are going strong several years later. I have to admit I never thought that was possible but they proved me wrong.
You know, back over a decade ago my first trip to Brazil I was sitting at a table eating lunch on Avenida Atlantica. And I had never been to Rio before. A girl walks up to my table and grabs my cellphone. I heard about all the crime so naturally I think, “hey she is going to steal my phone!”. But the funny thing was she was putting her phone number in my phone! LOL.
I remember thinking man..this is too easy!
This is part of the reason lots of older gentlemen retire abroad in places like Thailand, Brazil, Costa Rica, etc. truth be told. The allure of an older, overweight, fairly unattractive guy being able to land a “9 or 10” young hottie.
Participant[quote=UCGal]Now that we’ve figured out how the post got deleted….
Inquiring minds want to know what you posted in your update, ER.[/quote]Ah, I can’t all remember exactly as it was kind of long. I was responding to another post and I think it too must have gotten deleted as I don’t see it.
I also mentioned that the other OP is right you simply can NOT compare the cost of living in some of the bigger cities. For example, I own an apartment in Rio. When I originally bought it over a decade ago it wasn’t too expensive relative to it’s location and size. (It’s an entire floor just one block from the beach in Copacabana). But now it is worth a small fortune! When I bought it, I also had the exchange rate going for me and now it’s much lower.
So I believe my response also mentioned that some places can rapidly change as far as cost of living. What might be “affordable” once you move there can rapidly change in some of these foreign countries. Less than a decade ago Brazil used to be affordable but now it’s more expensive vs. most major cities. Everything from real estate, to groceries to restaurants. It’s all expensive there now.
Not to mention the crime rate is very high. The problem is you have nice areas like Ipanema yet they are right next to slums (favelas). That is common in several cities. So you have the very wealthy living side by side with the VERY poor which can create some recipes for disaster.
Some of my best friends live in Rio and they have experienced several bouts of crime. In over 30+ visits there I’ve only had one attempt of a mugging. Even if you are careful and speak the language (i’m conversational in Portuguese) you can run into problems.
Also, something else I mentioned was besides street crime, you just have to worry about general people working in and around your house. I know several people in Costa Rica as well as other places where their long-time maids/cooks that have worked for their family for many years have ended up robbing them or tipping off thieves.
There is more of that general type stuff you have to worry about when you live in some of these other countries in Latin or South America. Here in the USA we have lots of controls and also for the most part the legal and judicial system work.
In many other countries it’s not like that at all and police, judges, government officials can be easily bribed.
I’m not knocking living abroad but it’s important to understand ALL the upsides as well as downsides.
Sure, quality of life can be great. I know many older senior citizens that retired in some of these countries and they live like kings. Most of them are divorced or widowed and they have 20 something year old girlfriends (or girlfriends as young as their grandkids). It’s kind of funny in some instances because some of them didn’t even take the time to learn the local language and their “girlfriends” can’t speak English. So it can be a bit comical watching them! LOL.
[quote=blahblahblah][quote=SmellsFeeshy]
Brazil is not without its problems though. The crime rate in cities like Sao Paolo and Rio is very high. While doing research on Rio as a potential vacation destination I was a little concerned by all of the security warnings even at highly populated tourist spots.[/quote]Many of the people I hear touting Brazil as a great place to live have never been there or if they have have never ventured outside of protected enclaves. I have and let me tell you, it can get pretty rough. That’s not saying it isn’t great! I had an incredible time, the people are amazing and lots of fun. Of course I’d bet that the people in the Ivory Coast are great too but I’m in no hurry to move there.
I remember being driven through lots of areas in BR where my guide would say, “Don’t ever ever come here.” If you are white you are going to stick out like a sore thumb. If you are black, hispanic, or asian (many ethnic Japanese live in Brazil), you might go unnoticed until people realize you can’t speak Portugese and then it’s game on.
Fun place, don’t let me scare you, it’s definitely worth a visit. Living there? Not so sure. Also you would need a visa so you’d have to get married or have a job or something.[/quote]
This is also a GREAT post and spot on target. Many Americans that haven’t even visited a particular city/country or only visited a few times but read a lot about it THINK they know the city well but they don’t.
Visiting a city a few times for a week/month at a time is VERY different vs. living day in and day out for many years, especially in retirement. You simply don’t have enough time while on vacation to understand all of what goes on locally.
I’ve been to almost every country in South America and I do business in several countries in South America. And there is another side to most cities that you will never see unless you are living there.
Sure it’s different if you are retiring from the USA to maybe a 1st world developed country in Europe. But moving from the USA to a developing country is quite something different altogether.
ParticipantNo problem at all Rich. It’s good to know. I guess I wasn’t paying attention and was just reading the post above mine which seemed legit. I just thought it was strange but I guess it’s a good lesson to read all the posts above before answering.
Participant[quote=FormerSanDiegan][quote=earlyretirement]I posted an update earlier today but see it’s now deleted. Anyone know why? Is there some bug on the site or did I post something not allowed? Just curious.
I was just responding to a comment. I don’t think I broke any rules but if so I’d love to know so I don’t do it again. I was just mainly speaking about high prices in Brazil and crime rates.[/quote]
I believe that this old thread (started in 2011) was revived by a spam post.
Any replay to a spam post (done by clicking the “reply” button directly associated with that post) will be deleted if the spam post is deleted.
So, if a thread is revived by a spammer (sometimes these result in interesting revisits of the topic, which is a funny benefit of the spam) it’s best to click the “add a comment” button associated with the original post so that content is not deleted with the spam.[/quote]
Ahhhh. Ok..that is good to know. I was wondering and didn’t realize that was how it worked. Thanks for taking the time to explain. 🙂
ParticipantRead the article and notice the trend now.
http://online.wsj.com/article/SB10001424127887324338604578327982067761860.html
People that declared bankruptcy as late as 2008 and that were planning to buy a townhome for $200,000 to $250,000 which was their budget. What did they end up buying? A new home for $426,000… “far more than their budget”.
Or the other lady that paid 10% more than her budget.
“It’s much easier to buy a new home than an old one,” said Ms. Riley, a 41-year-old mother of two who works as a case manager for children with developmental disabilities in Alexandria, Va. “The builder’s whole attitude was, ‘No worries.’ They help you and they trust you. They really, really want you to get approved.”
My favorite part! “No worries!” “they help you and they trust you” “they really really want you to get approved”.
Gee, where did we see see this before??? LOL.
Participant[quote=Essbee]I didn’t see it, not yet at least. Was it sent by US mail or dropped at the door?[/quote]
It was sent via US mail. I live in a gated community so people can’t drop stuff off in front of our doors. But I have gotten 2 letters in the mail in the past week asking if I’m interested in selling. One was sent to my office address registered for my LLC that bought the house. And the other letter was sent directly to my address.
Here is the letter below. My office scanned the letter and emailed it to me. I’m copying and pasting it below but I left off his email and personal phone number for his privacy. (Also, he included a photo of him and his wife).
“My name is L. Tran. I am NOT a real estate agent or an investor. I am just an average family man looking to buy a home in this community. I was married in May 2012 and have done a lot of research about the community. I hope to buy a home in the 92127 area, where my children can go to the best school district, Poway Unified School District.
Did you know that the average listing fee to sell your home with a real estate agent in San Diego is 6% of the value of your home? This equates to $35,000-$50,000 in savings if you sold your home directly to me.
If you go through the traditional route of selling your home with a real estate agent, you would have the hassle of preparing your home for Open Houses, where strangers and your neighbors are walking through your home. If you are in foreclosure, who wants your neighbors knowing your financial situation? Who wants to go through that?
If you are in foreclosure or have negative equity (upside down in your mortgage) that doesn’t mean that you can’t sell your home. I can still purchase your home.
I am willing to buy your home in its current condition, as is. I am willing to overlook any damages or repair that need to be done.
If you are thinking about selling your home or have a neighbor that is, PLEASE contact me.”ParticipantDid anyone else in 92127 get an unsolicited letter from L.Tran asking if they are interested in selling their home? I was just curious.
ParticipantI posted an update earlier today but see it’s now deleted. Anyone know why? Is there some bug on the site or did I post something not allowed? Just curious.
I was just responding to a comment. I don’t think I broke any rules but if so I’d love to know so I don’t do it again. I was just mainly speaking about high prices in Brazil and crime rates.
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