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Haggling the price on my $1M E2 Mixed Use Building

06:36, Friday 13 January 2012 .. 0 comments .. Link

After a real sad, mad and very bad time, I think I may be running into some light at the end of the tunnel. Following my withdrawal from my purchase of property from Fannie Mae I was amazed to find a stand alone 1750sf 5 bed 2 bath commercial premises in my TEA zone for just $225K. It used to be a residential building. The beauty of the building was that it was truly a steal resembling a residential property but zoned in every way a commercial property. It seemed ready for my 6 bed elderly home. The first tick in the box was that I could utilize my ssas pension to buy it with no problem whatsoever. It was a pension I had not actually entirely created just yet as I was working with my IFA to navigate me in the right direction. The beauty of using a ssas was that the purchase would be entirely tax deductible against my ever growing rental income that was thrusting me relentlessly into a tax bracket that made me feel extremely uncomfortable with our tax system. It had taken quite a while to get hold of the listing agent and eventually I did. I noticed that though he was representing the bank, since the property was an REO he was keen on representing me. Of course he would, he would be getting 5% commission. Lets just say that when I got my agent to represent me in the transaction I lost the property to another buyer which was quite a painful experience. In any event, I am one of those persons that just have to be either looking for or in the process of buying property to feel normal and that is when I found the dream property in North Hollywood. 6 residential units, 6 retail units. Total rental income approximately $95K per annum at a price of $950K. I approached my agent from the onset and asked her to consider writing an offer for me and exhausted from the last failed purchase she told me to ask the seller to give me a concession while ruling her out of the transaction. They have pretty much agreed to knock of 1.5% off the asking price which brings it down to $935K. Sadly as the property is mixed use I cant use my pension to purchase it but I could however borrow funds from my pension to purchase the property over a maximum of 5yrs. What makes it even juicier is that my agent now wants to see if he could get me a chinese bank loan for the balance which the owner is supposed to carry as per his offer. It really makes me feel good to feel that there is no discrimination against me being British, at least no yet.

Escrow Cancellation - Lets start again

05:07, Monday 19 December 2011 .. 0 comments .. Link

Ok, after about a month back and forth with my real estate agent on the purchase of my property I have decided to pull out of the purchase. It wasnt because i had not seen the property first, no; it wasnt the fact that the disclosure indicated that human debris was found in the premises, no; it wasnt the fact that the alley way which I thought would be beneficial to my 8 car garage turned out not useful, no; it wasnt the fact that a slightly smaller lot a mile away came on the market for less then half the price, no; I could go on to all the reasons one would think this would be a no go transaction but the reason why I decided to pull out is because the guy at the modular home building factory had left the company and nobody else had taken the time to give me an estimate to build and deliver 4 condos to the site! I did my calculations, the chances of getting an E2 for buying a building lot even with my site plans is very remote. In addition the property taxes which is the equivalent of council tax was approximately $5K which is alot to pay for a fixer property. It was a sad experience to write both my escrow company and my real estate agent that I wont be proceeding with the transaction. I know that they the property was overpriced anyway, so its likely they will knock the price down further before releasing back onto the market. The purpose for which I require the property is unique so with luck they will come back with a reduced price that will make it worth my while proceeding the purchase. The fact is without a modular home builder the development task is alot more difficult. On a brighter note, my second Doing Business As application which I posted last week has gone through, which means that once HSBC receive the forms they can open a business account for me. I will then be run any company as a sole propreitor while making sure that any asset I buy is held in the name of the llc.

DBA Sole Trader E2

07:23, Sunday 11 December 2011 .. 0 comments .. Link

I am actually frustrated beyond belief as to the problems I am having setting up a branch company for my new company. California Secretary of State finally returned my application of incorporation of a branch company on the basis that the name of my UK company had the word Corporation LTD. On this basis they believed that it was not a limited company eligible for a limited liability Company status in the state - Wrong. Anyway I had already decided that it was not the best state to incorporate so I wasnt dissappointed. However when I did find out that the company I incorporated in Nevada could not have a HSBC bank account on the basis that there were no HSBC branches in that state, I was somewhat worried as to whether I had infact incorporated in the right state. The simplicity of HSBCs global and seamless money transfers between countries cant be over emphasized. Anyway i figured the only way to get a HSBC business account in Los Angeles would be to set up shop as a sole trader. They confirmed that a Doing business as certificate would be sufficient to set up a business account using my relationship manager in the UK. However I have been waiting 2 weeks now for the forms I sent to even get to the los angeles county recorder and Im getting very impatient. Even my accountant has completed my accounts for YE 2011 and I didnt have to tell him to hurry up more than once! Obviously I would have liked to purchase the property I am in Escrow with, in the name of the company but owning one property in my name surely wont set me back too much. I think I have made some progress but far slower than my expectations. Right now, I cant open a business account without my DBA being registered, I cant buy my modular home without my business account set up, I cant apply for my E2 without at least putting money at risk with regards to buying my modular home Grrrrr

Second counter offer on house from Freddie Mac

01:21, Tuesday 22 November 2011 .. 0 comments .. Link

Ok so I heard back from the realtor regarding my offer on the house im buying, Freddie Mac reduced the price by another $2K its becoming quite embarrassing haggling like this so I have signed the agreement. They want me to close on 16th December but I want to push that out till 29th December. There are back up offers but I guess I was making the highest cash offer so hopefully we can open escrow this week or next. After waiting almost 4 weeks for my Cali LLC to be formed I decided to file online with Nevada, it took just 30mins to set up. I studied it hard and was quite happy with all the charges but a full price of $200 for a business license for just one month Nov - Dec 11 is a sting. Exemptions include working from home, working in motion theater etc. I dont think my first property will be purchased through the series just yet. I did like the idea of a restricted company something only Nevada offers and which can be beneficial to real estate investments, Im yet to see that happen.

The Nevada Series LLC and Mozilla Browser

01:13, Friday 18 November 2011 .. 0 comments .. Link

I think I made headway this week in my attempt to incorporate a second company which would be purely domestic. The 3 runners up were to incorporate in Delaware, Nevada or Wyoming.I had used the professional services of companies to incorporate in the first two states a decade ago but yearly filing fees and the lack of ease on annual returns meant they no longer existed or required reinstatement fees them back into existence but I wanted something new. In the UK companies house allows you to file annual returns online for just £14. However in the US the equivalent fees run in the region of about $100 to $800 a year in California. Its no wonder when you log onto the SOS website so many companies are dissolved! $800 a year is alot of money to pay for a firm that may not even be making a profit. The beauty of the Series LLC is something that would be ideal for asset protection on each property I purchased. Only about 5 states offered this unique LLC type, and Nevada was one. In addition Nevada offered same day online incorporation services which beat californias antiquated postal or in person 5 week back log service. As I already had an RA in Nevada this was my preferred choice. For $100 a year my RA emailed me each time a letter came into my box so I could choose which ones they sent to me in the UK. The only problem I encountered with the Nevada online incorporation was that it only used Internet Explorer and I used safari on my apple mac. I also tether my broadband service from the wifi hotspot that beams of my Samsung Galaxy Tablet unlimited data tariff. In effect that meant when I realized I could set up an account but could not log into my account, I was subjected to a 4hr download session of mozilla fox browser. Once that was done I was able to log in using my new browser.

Setting up a Company

10:30, Wednesday 16 November 2011 .. 0 comments .. Link

After much tossing and turning about whether my decision to form a subsidiary of my UK company was the right thing to do, I realize that many firms would have been willing to take your money to set up a company but rarely offer advice as to whether the company is the best route for the business you intend to run. My personal opinion is that I like the idea of a sole trader until a business gets off the ground. The idea of paying $800 in filing fees and incurring other liabilities for an entity without even knowing if the visa to grow the company will be allowed just doesnt feel right. I guess its all about the risk which. Its just not the way I prefer to take a business off the ground. Anyway its done now I have a foreign branch of my UK company under way and it turns out that its not the correct company I need for an E2. I should have set up a domestic company. However it may be a blessing in disguise, I do think I will leave my foreign branch intact for an L1 should the need arise i but I do have to register a new company again for my E2. What I wont be doing is setting up another california llc. Its going to be a state that has no backlog, option for online incorporation process and a much more reduced filing fee. If I had to advice anyone looking to set up a company for the E2 I would recommend initially going for a company with a low filing fee and then once approved register in your preferred state.Thats how I understand it now, but I dont like putting all my eggs in one basket, so a branch company in one state and a domestic another will work just fine.

My E2 TAB E (Ownership) A complete money trail of the funds invested

08:34, Thursday 3 November 2011 .. 0 comments .. Link

This is the problem I face for being self employed! I just hope I dont need two ring binders, I probably dont need all of this but I really dont want to take chances. TAB E (Ownership) EXHIBIT 5: A complete money trail of the funds invested for the Start up Business Exhibit 5 (a)i Summary of earnings of over 8 years Exhibit 5 (b)i Company Accounts for year 2004 Exhibit 5 (b)i Company Accounts for year 2005 Exhibit 5 (b)i Company Accounts for year 2006 Exhibit 5 (b)i Company Accounts for year 2007 Exhibit 5 (b)i Company Accounts for year 2008 Exhibit 5 (b)i Company Accounts for year 2009 Exhibit 5 (b)i Company Accounts for year 2010 Exhibit 5 (b)i Company Accounts for year 2011 Exhibit 5 (c )i Personal Tax return for year 2009 Exhibit 5 (c )ii Personal Tax return for year 2010 Exhibit 5 (c )iii Personal Tax return for year 2011 Exhibit 5 (d)i Mortgage Statement and lease for Property 1 Exhibit 5 (d)ii Mortgage Statement and lease for Property 2 Exhibit 5 (d)iii Mortgage Statement and lease for Property 3 Exhibit 5 (d)iv Mortgage Statement and lease for Property 4 Exhibit 5 (d)v Mortgage Statement and lease for Property 5 Exhibit 5 (d)vi Mortgage Statement and lease for Property 6 Exhibit 5 (d)xii Mortgage Statement and lease for Property 7 Exhibit 5 (d)xiii Mortgage Statement and lease for Property 8 Exhibit 5 (d)xi Mortgage Statement and lease for Property 9 Exhibit 5 (d)x Mortgage Statement and lease for Property 10 Exhibit 5 (e)iii Movement of these funds to a U.S. account Exhibit 5 (f)iv Use of these funds for qualifying business expenses. Including invoices and bank statements showing matching debits (highlighted) Exhibit 5 (g) Signed valid purchase agreement for the inventory (land) of the New Business Exhibit 5 (h) Binding escrow agreement that explicitly says where the money goes if the visa is issued, what happens when it does not. Exhibit 5 (c)i Signed valid lease for business premises Exhibit 5 (c)ii Evidence of equipment inventory purchase. Exhibit 5 (d) Investment spreadsheet. Evidence of investment required copies of debits from bank accounts, checks and invoices.

E2 Visa Pension

06:02, Wednesday 2 November 2011 .. 0 comments .. Link

When I set up my company in 2003 it was because the first £10K in small business wasnt being taxed and as I was working full time. Any additional earnings from property may have pushed me into a higher tax bracket. However the new government changed and removed the benefit so I didnt buy any additional properties in the company name and proceeded to buy the rest in my name. The Small Self Administered Scheme Pension which HMRC has modified means I can save a fair bit of tax again. All I need to do is take profits before tax from my company each year and shove it my SSAS. Take the funds out to purchase commercial real estate and any yield from such an investment is considered growth of the pension fund and also not taxable. When the fund matures the first 25% is not taxable then the balance is taxed under the standard PAYE terms. SIPPs are not keen on this arrangement just SSAS and not even all SSAS pension administrators know how to do it but fortunately I have found one who does it mainly for the EB5 applicants. I want to know whether I would be able to back date some of my income. That means I could get a good chunk of £15000 in tax I paid earlier this year. I have been looking for a tax saving scheme like this for a long time and never knew it would exist in a pension. Ultimately its like getting an interest free loan and a 25% personal allowance as opposed to the current 10%. I dont think any thing could be better. SSAS administrators charge about £750 a year to set it up and run but anyone could run it. I reckon the workload of running it would be like filing your own tax return rather than getting an accountant to do it.

Business Account Hiccup No2

10:04, Wednesday 2 November 2011 .. 0 comments .. Link

Ok just when I thought things were going ok, HSBC branch LA email me again saying that he doesnt think he can open an account for me without an SOS copy of the articles of organization. SOS had emailed me to say they didnt need it where a parent company in the UK is concerned. I really had not meant to complicate matters but I think I have. I wanted the company to be a subsidiary of my UK company. Doing so allows any establishment to know that ultimately the parent company is in the UK and to exercise leniency in delays that may be created by virtue of the multinational nature. I really dont know why I wanted the companies linked but I think it streamlines everything and as the only member I really just want one set of obligations. HSBC have told me that even if I open a separate entity they will still be able to link my US and UK business accounts as I am the only member. I therefore contacted a company to open a business in the US but he says SOS are taking 5weeks even if I expedite! now Im really scared! Im now thinking that a sole trader may be the best option but I dont think that will fly for an E2 application. Im thinking that a B2 may be a better visa. I am certain that 6 months should be sufficient to buy the land get the permits build the property and put it back on the market for sale. Also the sale of the land wont need to be tied up for 3 months waiting for an E2. Its tempting but its really not an option!

E2 Investment Property Deals

07:28, Tuesday 1 November 2011 .. 0 comments .. Link

One might think why I ought to resort to doing everything myself but what most people forget is that the the property buy to let market can get you idle extremely fast. So with the amount of time on my hands I do enjoy being busy. Yesterday however, I thought I would venture online to see what other investment opportunities are out there and I was amazed to find mixed use property 6 flats 6 shops in North Hollywood for roughly $850K. Even better the owner was prepared to finance it for 10 years at 6%. So with a 30% down payment of roughly $290K I would be yielding an annual income of $95K I thought that was a reasonable package for an E2 bearing in mind that there was a seperate house that was vacant in the rear of the building which I could also move into. So my mind was already on how to change my business plan to accommodate this. The problem was that I had already made an offer on a piece of land where I could build something similar. I gave it more thought, and realized that I could build something that would yield the same amount for $500K! and so the deal was not as attractive as what i was negotiating with my realtor. The only problem is that the seller of the land that I am interested in, will only hold it for so long but will he hold it long enough for me to get my E2.

Business Account Hiccup No1

04:43, Tuesday 1 November 2011 .. 0 comments .. Link

Well this HSBC USA branch is so swift! He has already emailed me back to say they have already checked with Secretary of State California and have confirmed my Business has not yet been registered. Indeed, I bet you it is still just crawling its way they via Royal Mail boat! I guess the good thing is that there is no other name that exists so I should definitely get my unusual, but desired name. Another problem is that as I am opening a subsidiary of my UK company I did not need a new set of articles or memorandum as the SOS says the UK ones are fine but now he says he wants a filed set. I think I will send him my Certificate of good standing I have received from companies house along with the filed copies of my articles and memorandum for it. I definitely would like to streamline everything into a neat set of related entities. Earlier today I was investigating SSAS Small self administered pension scheme because I could apparently turn my investment into a pension. However the only shortfall was the company wanted £750 a year to manage it, I really think that such a fee erodes any savings. Its like the company that wanted $800 to deal with account opening when it costs just $70 to register the business, $0 for bank opening and $0 for a tax id!

Business Account over the phone and Tax ID with no SSN

09:01, Monday 31 October 2011 .. 0 comments .. Link

I think I got quite a bit done today despite a phone call from my cousin at 5.30am. I told her the clocks had moved back but quite gently though, as she had agreed to be my resident agent for my california LLC. I called HSBC to open a bank account rather prematurely because my entity is not yet registered, but I really didnt feel like waiting to for confirmation from the Secretary of State California. The HSBC website was not helpful and the online business opening is a joke. Its simply a form that needs to be taken into a branch. When I called the US offices they needed to talk to a branch local to where my business will be - the nearest was Beverly Hills, I remember going to the location and I was happy with it despite the shortage of parking spaces as I didnt want to open an account with the down town branch. Anyway I ended up having to call the Beverly hills office direct who were also of little help. I read the online reviews of the branch and realized that the branch had a bad reputation as they said I was in the UK and needed to talk to my premier relationship manager. I wasnt going to give up and remember my visit to East LA HSBC. The chinese guy there was very pleasant, he told me to fax over my operating agreement, articles and two pieces of ID. I asked him about a Tax ID and he said oh yes he was going to need that too. I got onto the phone with the IRS and they wanted to know my SSN I gave him one that I had been issued with some 15 years ago when I was on J1 and he could not locate me. I asked him if it was imperative to have a SSN for a Tax ID and he said no and proceeded to give me my TAX ID over the phone. I immediately emailed this to the HSBC chap who is going to work with my HSBC relationship manager in the UK to open my account. I just hope that the name I chose for my company is available otherwise I need to change my bank account name and tax id documents as punishment for rushing ahead of myself.

Spreadsheets and software

08:48, Monday 31 October 2011 .. 0 comments .. Link

Im working on my YE 2011 tax return its not actually due till around January next year but I need my accountant to sign this off because it will make my E2 application more current and the application stronger. I have 10 properties and most of the figures relate to their management expenses and rent coming in. Excel is giving me a rough time right now so I am going to use Numbers on my apple mac. My apple mac has been my biggest asset when it comes to document management especially the pdf pen application which pulls various pdf documents into a single document and lets you move the pages in any order you want. I must upgrade to the latest version which will go as far as allowing me to number the pages. This whole process reminds me of when a had to represent myself before the LVT and prepare 5 bundles and ring binders. I was challenging the reasonableness of my service charge bill which I got knocked down from £24K to £6K but had I had no representation. I think most legal work is really paper organization.

Information Gathering for the E2 Application.

10:40, Sunday 30 October 2011 .. 0 comments .. Link

I have not yet heard of anyone who has filed their initial E2 visa application on their own. I have heard of renewals being done however I have decided to this on my own because I have had too much hesitancy with attorneys surrounding my business proposition which involves real estate. Dont get me wrong even I am a little nervous about a project that will involve approximately $500K investment. The land I have found measures 50 by 160 and is zoned C3 means I build or run pretty much anything. My first options are building a hotel, but the city have confirmed the minimum number of rooms has to be 100. I have already bought my binder and hole punch, here are a list of things I must do for the week: 1. Get my mortgage statements together 2. Get my tenancy agreements together to prove trail of income 3. Complete my accounts for my accountant to do my tax return for YE 2011 4. Get proof of ownership of my UK properties from Land registry, 5. Check into my DS 160 completed form so that my completed form does not expire. I have not gone to bed tired in a long time, today is one of the days that I am exhausted from the process...

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