Jan 20, 2014 | Home Buyer Tips, Home Seller Tips, Interesting Stuff
An LLC is a valid and effective way to hold and manage real estate. An LLC is recognized 
as a separate legal entity for tax and liability purposes.
1. An LLC can provide certain tax and liability advantages. In certain circumstances, holding title to real estate in an LLC can provide a valuable tax advantage. However, if the main intent of forming an LLC to hold real estate is for its tax advantages, you should be sure to speak with a qualified tax advisor. Be certain that you obtain a specific tax identification number from the IRS for the LLC. Applying for an Employer Identification Number or tax id is a rather simple process and can be done online. You will need to provide a tax id number to the closing attorney.
2. There is a cost to create and maintain an LLC. The cost to file for and create an LLC in Massachusetts is around $500.00. This does not include the cost of legal counsel. An annual report will need to be filed with the Mass. Secretary of State each year at a cost of $500.00 per LLC. In most circumstances, if the intent of having an LLC is to avoid legal liability associated with the ownership of real estate, you should probably have two LLCs. One LLC to hold title and one to manage the property. Be certain that the application to create an LLC and operating agreement are prepared properly. Mistakes made in filing for an LLC can be costly and time consuming to correct. Don’t file for an LLC in any other state or jurisdiction unless you have a really good reason for doing so. Cost should not be the sole reason. Consult qualified legal counsel to assist you.
3. An LLC is not right for every situation. Although an LLC can hold title to real estate, it does not mean that it is the best way to do so. You should carefully consider the pros and cons of using a realty or nominee trust, a standard corporation, or individual ownership for each piece of real estate. We often find that sellers spend needless time and money to hold title in an LLC when it really was not necessary or proper for their situation. It may be considered “fashionable” to have an LLC, but it is not always prudent.
4. An LLC is not like a regular corporation. One of the primary differences between an LLC and standard corporation, or S Corp, is the way gains and losses are accounted for between members and shareholders. With an LLC, gains and losses can be allocated disproportionately between members, not so with an S Corp where it is shared between pro-rata shares of ownership. With LLCs, members are able to pass losses to their personal income reporting. This can’t be done with a regular corporation.
5. An LLC must be in good standing with the state in order to sell its real estate. If your LLC holds title to Massachusetts real estate you will need to prove that the LLC is in good standing with the State before you can actually close on the sale. The most acceptable way to show good standing is to obtain a certificate from the Secretary of State’s office. The Secretary will not issue a certificate if the LLC is not current with its annual report filings. The cost of a Certificate of Good Standing is about $25.00. Obtain it well in advance of an anticipated sale, the closing attorney will likely require it prior to closing.
May 21, 2013 | Interesting Stuff, Selling Real Estate, Success
By John Chapin
You hear it everywhere you go: “Sales are down because of the economy. My customers simply aren’t buying as much.” There are some people out there saying the economy doesn’t matter, it’s what’s going on in your own head that matters. While it’s true that what goes on in your brain is always more important than outside circumstances, the economy is still what’s affecting many businesses. If yours is one of them, put the following seven ideas into practice and you’ll find that the affect on you will be minimal, and in fact, you may notice no change or even a positive one.
1) Don’t let the economy be your excuse.
After a tough day or some difficult sales calls, it’s easy to use the economy as an excuse. If you do, people will hear it in your voice and you’ll sell less. This attitude also leads to working less. In a down economy, when salespeople should be increasing their calls and activity level, the average salesperson cuts calls by 37%. The answer? Use the down economy as a warning and motivation to work harder and smarter, not as an excuse to back off. If you back off, business will go down, if you work harder and smarter, business will improve. As the saying goes “When the going gets tough, the tough get going.”
2) Get better at selling.
When there are fewer sales opportunities and prospects, you must do better with the ones you have. The way to do this is to get better at selling. Read books, listen to tapes and CDs, watch DVDs, become a sponge and absorb everything you can get your hands on. Using this strategy has helped many salespeople improve to the point where they actually sold more in a so-called down economy than they sold when times were good. Now is the time to improve your skills; constant and consistent learning is the best way to grow your sales.
3) Keep a good attitude.
Your attitude is your most important sales tool in your arsenal; you have to keep it sharp. Now is not time to read the front page of every newspaper and watch every newscast. Our brains are like computers “Garbage in, garbage out.” What you should be doing is putting as many good ideas as possible into your brain. Pick up anything that is inspirational, motivational, positive, and upbeat and use it to keep a good attitude and stay focused. Be positive and persistent. In addition to putting good ideas into your brain, surround yourself with positive people and stay away from negative people.
4) Prepare for the price objection and build value.
People are focused on price more than ever these days. Prospects and customers will do everything they can to commoditize vendors and simply go with the lowest price. Thus it is very important that you build value. What are your primary benefits? How are you, your company, and your product better than the competition? Are you local; is your long-term cost less, can you respond to service calls faster? You need to accentuate your primary benefits, make them as powerful as possible, and provide proof in ROI Models, testimonials, and the like. Finally, come up with some solid responses to the price objection. (more…)
Sep 9, 2011 | Buying Real Estate, Housing Analysis, Interesting Stuff, Selling Real Estate, The Economy
Home affordability slipped slightly last quarter, dragged down by rising mortgage rates and recovering home prices in Massachusetts and nationwide.
The National Association of Home Builders reports a Q2 2011 Home Opportunity Index reading of 72.6. This means that nearly 3 of 4 homes sold last quarter were affordable to households earning the national median income of $64,200.
Q2 2011 marks the 10th straight quarter — dating back to 2009 — in which the index surpassed 70.
Prior to 2009, the index had never crossed 70 even one time.
However, we must remember that the Home Affordability Index is a national survey. From region-to-region, and town-to-town, home affordability varied.
In the Midwest, for example, affordability was highest. 14 of the 15 most affordable markets nationwide were spread throughout Ohio, Michigan, Illinois and Indiana. Only Syracuse (#9) cracked the list from other regions.
The top 5 most affordable cities in Q2 2011 were: (more…)
Sep 1, 2011 | Buying Real Estate, Interesting Stuff, Mortgage Rates, The Economy
If you’re shopping for a mortgage rate, today may be a good day to lock one down. That’s because Friday morning, the Bureau of Labor Statistics will release its Non-Farm Payrolls report for August 2011.
The “jobs report” tends to have a big influence on mortgage bonds and mortgage rates in Leominster.
The jobs report is a monthly issuance, providing sector-by-sector analysis of the U.S. workforce. It also report the national Unemployment Rate.
Wall Street expects the August Non-Farm Payrolls data to show 75,000 jobs created in August, down from 117,000 in July; and it expects that the Unemployment Rate will remain unchanged at 9.1%.
The jobs report’s connection to mortgage markets is straight-forward — as jobs go, so goes the economy. This is because when the number of working Americans rises :
- Consumer spending gets a boost
- Government tax collection gets a boost
- Household savings gets a boost
These are each good turns in a recovering economy. (more…)
Aug 31, 2011 | Federal Reserve, Interesting Stuff, Legislation, Mortgage Rates
The Fed publishes meeting minutes 8 times annually — three weeks after each scheduled Federal Open Market Committee get-together. The Fed Minutes summarizes the FOMC meeting.
The Federal Reserve released the minutes from its August 9, 2011 Federal Open Market Committee meeting Tuesday.
The Fed Minutes contained no surprises and, as a result, mortgage rates across Massachusetts and nationwide have idled.
Although it gets less press attention, the Fed Minutes is every bit as important as the more highly-publicized, post-meeting statement from the FOMC. With its detailed record of conversation, the Fed Minutes highlights the discussions and debates that shape our nation’s monetary policy.
For example, here is some of what was said at the Fed’s August 2011 meeting :
- On growth : Economic growth had been slower than the committee expected
- On housing : The market “remains depressed”. Underwriting standards are “tight”.
- On rates : The Fed Funds Rate will remain low until mid-2013
In addition, the Fed talked about whether a third round of asset purchases should be announced. Ultimately, that plan was rejected by consensus.
The FOMC’s next meeting is a 2-day meeting, scheduled for September 20-21. The meeting was originally scheduled for just one day, but Fed Chairman Ben Bernanke chose to extend it to two. Wall Street believes that the extension was made so Fed members could discuss new forms of economic stimulus. (more…)
Jul 28, 2011 | Buying Real Estate, Housing Analysis, Interesting Stuff, Selling Real Estate
Standard & Poors released its May 2011 Case-Shiller Index this week. The index measures change in home prices from month-to-month, and year-to-year, in select U.S. cities.
May’s Case-Shiller Index showed a 1 percent increase from April 2011. Home values rose in 16 of the Case-Shiller Index’s 20 tracked markets. Only Detroit, Las Vegas and Tampa fell. Phoenix was flat.
Don’t look too far into the findings, though. Like the FHFA’s Home Price Index, the Case-Shiller Index is rife with flaws.
The first flaw of the Case-Shiller Index is its limited geography. Despite being positioned as a national housing index, Case-Schiller Index is sourced from just 20 cities nationwide. There are more than 3,100 municipalities nationwide.
The Case Shiller Index’s second flaw is that it ignores all home types excepts for single-family, detached homes in its findings. Condominiums, multi-family homes, and new construction are not included in the Case-Shiller Index.
In some markets, these excluded home types outnumber the included ones. (more…)
