How do you pay yourself? - Posted by Karlz

Real Estate Investing
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Posted by Karlz on February 16, 2001 at 24:14:41:

I thought I might have to make a corp or LLC or something for tax purposes, but really haven’t looked at that much in depth as of yet. Kind of brings anothter question to mind.
Do you set aside a certian amount each sale to be used for taxes? Was kinda thinking along the lines of aprox. 25% of profit into a money market or something to cover any tax liabilities. I’d hate to have to rush around and try and sell a property at the end of the year to cover the tax mans cut.

I guess the best thing to do would be for me to go talk to a tax man and get some answers and a plan set up :slight_smile:

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How do you pay yourself? - Posted by Karlz

Posted by Karlz on February 15, 2001 at 11:06:37:

I have been researching real estate investing on and off for the last few years. I even bought Mr. Sheets program a few years back and it helped me save a few thousand on my current house. I am now at a time where I should be able to start into some serious investing(hopefully). I’ve been hitting the web hard reading and finding more and more information on RE investing and there is one question that I can’t seem to answer.

Just how do you pay yourself??

I understand starting out all profits should go back into more investments to gain net worth etc. But what about after one is established and able to “quit the day job”?

Thanks for your answers and hopefully you will see more of me asking lots of questions :slight_smile:

Karl

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Two of the best ways to pay yourself are… - Posted by David Krulac

Posted by David Krulac on February 16, 2001 at 09:05:21:

  1. Refinacing, cash out, borrowed money is not taxable.
  2. Long term capital gains, taxed at the max rate of 20%
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Re: How do you pay yourself? - Posted by Mark - IL

Posted by Mark - IL on February 15, 2001 at 22:13:59:

What I have done is set up a LLC. I only pay taxes on April 15. My CPA Does the books and figures how much to pay at Uncle Sam. I write myself a check for how ever much and do it. It is very easy that way. I pay my self everymonth a certain figure.
My focus on real estate is to create Cash flow. After looking at a property and the expenses I try to avg. around $200.00 a month in cash flow from each property.
If I don’t It is not worth it for me to try to work the deal out.
Hope this gives some ideas.

Just another Investor who is lookin for another CASH COW. :slight_smile:

Mark - IL

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Re: How do you pay yourself? - Posted by DanT

Posted by DanT on February 15, 2001 at 17:14:51:

It depends on your needs, structure and of course current cash flow. I have primarily rentals which allows me a steady cash stream, thus I can take a given amount out each month. On the occasion I sell one and choose not to reinvest it, I simply pay myself as a “bonus”. DanT