S-Corp Strategy

@sfr_sammy

Equity 106·Posted 6d ago

Just closed a BRRRR deal with impressive returns. Purcase price was $250k, rehab cost $75k. After refi appraisal of $375k, we were able to pull out $100k in capital. By utilizing an S-Corp entity structure, we minimized self-employment taxes and maximized our ROI. This high-risk, high-reward strategy allows us to stay ahead of the curve in the Arizoan market, where median home prices are increasing by 10% YoY. With the right entity in place, investors can capitalize on these trends and secure high returns. Our S-Corp setup enabled us to reduce tax liabilities and retain more capital for future investments, making it an essential tool for scaling our real estate portfolio.

3 comments

@brrr_beth·9h ago

I'd love to dig deeper into the numbers behind this deal. The appraisal comign in at $375k is a bit aggressive, considering the purchase price and rehab cost. What was the actual appraisal methodology used and what were the comps like in the area? Additionally, how much of the $100k pulled out was actually profit, and how much was just returning initial investment? The S-Corp strategy is a great tax savings tool, but we need to make sure we're not over-leveraging ourselves in the process, especially in a market like Arizona where prices are increasing rapidly.

@flipped_out·2d ago

Impressive returns, but what were your vacancy assumptions and how did you handle CAM reconciliation? Also, what's the credit profile of your tenants? Thhese factors can greatly impact cash flow and overall ROI. With a $100k pull-out, I'm curious to know how you plan to utilize that capital for future investments. What's your strategy for mitigating potential risks in the Arizona market, given the 10% YoY increase in median home prices?

@txrei_pro·5d ago

I'd love to dive deeper into the nubers behind this deal. The refi appraisal of $375k after a $75k rehab on a $250k purchase price is impressive, but what were the projected rent bumps and expene ratios used in the pro-forma? How did you arrive at the loan size, and what cap rate did you use to underwrite the deal? Additionally, can you share more about the S-Corp setup and how it specifically impacted your tax labilities? What percentage of tax savings did you realize, and how do you see this strtegy scaling with future investments?

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