How To Structure Your First RENTAL Property (And Mitigate Taxes!)

Are you interested in diving deeper into this topic or chatting with an expert? Feel free to schedule a call here: aba.link/pl3
In this video, Toby Mathis, Esq. will discuss the correct way to structure your first rental property and strategies to mitigate taxes.
How should one structure their first real estate property? This is a common question most newcomers to real estate investing may find themselves asking.
You can also be asking questions like…
"Why would I care? Does it matter?" 15:00
And the answer is yes and yes.
It is very important to make the best choice for you when deciding on a structure for your first property.
Toby Mathis, Esq. has been investing in real estate for many years now, and he has been around the bend and back when it comes to the struggles. Which makes him an excellent point of reference for learning more about the subject.
With that being said, we circle back to the question, how do you structure your first property?
If you have a minute to spare, then we have the solution you are looking for.
Learn more about how to decide which choice is best for you and how to arrive at a said choice.
Keep in mind that the answer to this problem can be found in a process. A process that walks you through what you need and how you can protect yourself. So be sure to watch the video until the end to ensure you get all the information possible.
Until next time, remember to like, share, comment, and subscribe to the channel.
Thank you for watching, and good luck with your first and hopefully first of many properties.
Show Notes:
0:00 Intro
0:14 The Process for Decision
4:05 The first step
8:50 Ownership
14:30 Looking at Land Trusts and LLCs
10:00 Structures
18:02 Active Trader Business
24:05 House Hacking
31:04 Outro
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ABOUT TOBY MATHIS
Toby Mathis, Esq. is the best-selling author of Infinity Investing: How the Rich Get Richer And How You Can Do The Same. Toby is a tax attorney and founded Anderson Business Advisors, one of the most successful law, tax, and estate planning companies in the United States. Learn more at aba.link/tobyaba
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The information provided in this video should not be construed or relied on as legal advice for any specific fact or circumstance. Its content was prepared by Anderson Business Advisors with its main office at 3225 McLeod Drive Suite 100 Las Vegas, Nevada 89121. This video is designed for entertainment and information purposes only. Viewing this video does not create an attorney-client relationship with Anderson Business Advisors or any of its lawyers. You should not act or rely on any of the information contained herein without seeking professional legal advice.
#structure #rentalproperty

[@TobyMathis]

Claim Your FREE 45-minute consultation to receive business planning tips and asset protection. 👉 aba.link/pl3

[@oliverpattondavis2419]

I need to transfer a property into a LLC in another state please how do I go about it? Thanks.

[@hannahcasey1999]

Thank you for this knowledge! Just got my first rental and was clueless about the structure. Great info!! 👏

[@organizer14]

Excellent overview of options! Thank you!

[@Abelieverintruth]

Toby I love your videos! They are awesome! I have been a real estate investor- operator for over 35 years and I have not seen this type of intelligence on the topics anywhere on you tube. Thank you for your great videos. At some point in the future can you go over Alloidal Titles and Land Patents?

[@TobyMathis]

We appreciate that, thank you for being part of our audience!

[@naelab4865]

Love the way you explain things. Thank you

[@dcmiracles2785]

Very well thought out! Many thanks!

[@cryptotiger7780]

So much to learn with all your videos. Thank you for doing these videos

[@michaelpaul5801]

this is brilliant..such crucial info...you went over everything i need to consider, even your side notes are entertaining and pertinent. you have a brilliant way of teaching and conveying the info; great skills and knowledge--thank you

[@pfschuyler]

I like the no-nonsense approach and personal experience.

[@bobmonson6432]

Excellent pace Toby, easier to understand your content. Thank you.

[@TobyMathis]

We are glad you think so!

[@lcinflorida8728]

I find these talks fascinating... I wish I had your knowledge! Thank you!!

[@TobyMathis]

Thank you for watching our content!

[@ReggieMichel]

Uncle Toby... This was SUPER Valuable (as usual) and I needed this today. Will be setting up a consult. Thank you! 🙏🏾

[@TobyMathis]

Wonderful, let us know if you need help with anything!

[@ShinyFeathers54321]

Binge watching your videos and learning so much ~ appreciate all of the info you share!

[@TobyMathis]

Thank you for your kind words! I'm glad you find the information helpful.

[@brianjenkins2879]

Very interesting this guy knows his stuff

[@pris10251111]

Your videos are so informative, thank you!

[@TobyMathis]

Glad you think so! Thank you for watching!

[@johnhardy2702]

Thank you, Tony

[@uncletookie9102]

You're hilarious! Great showmanship. Everything is excellent especially the "It depends! 😁" great attorney joke.

[@TobyMathis]

Thanks! 😃

[@theresamcgallicher]

I bought a 2nd home financed under my own name, then rented it out on VRBO & Airbnb. At tax time I received NO benefits because (according to my tax preparer) the mortgage was not held by my LLC. 😢

[@cryptotiger7780]

Great video. Thanks

[@SunshineRisesAgain]

Thank you for being thorough by going into the reasons why one must look at more than what is on the surface. Excellent presentation 😎👍

[@TobyMathis]

Our pleasure! Thank you for watching!

[@richardgerwing5377]

@@TobyMathis Would it be possible to have a new home with rental space in the back yard or something similar to that?

[@richardgerwing5377]

Yes selling my car and then the home we live in now do some remodeling and rent it

[@gonzalolozano1196]

Thanks for sharing this information god bless you

[@assetmax]

Thank you

[@vamingxiong4376]

Very good information thank you for putting out videos!

[@TobyMathis]

I'm glad you found the information helpful!

[@jwoycke]

Love your videos! House hacking tax question here. I’ve found a fair amount of info that discusses the house hacking situation related to passive rental income (schedule E). I’m having a really hard time finding info on house hacking and renting out the portion of the house, in my case a basement ADU, as a short-term non-passive active business (7 days or less with material participation). I do understand the awesome tax benefits of short-term rentals (from you), but what are the things to look out for in the house hacking non-passive active business situation (schedule C)? Anything to worry about in this specific situation versus the passive rental situation. Thank you.

[@Allan2go]

Great stuff, received the Cat pic too

[@elsonmartinez4025]

I really enjoyed this

[@TobyMathis]

Thank you!

[@benvanbronkhorst6531]

Thanks for the info 🙂

[@TobyMathis]

No problem! Thank you for watching!

[@h.f.9238]

Wow! I work with attorneys. This guy is sharp.

[@thefrankperspective4247]

hahaha, Toby went to the Graham Stephan school of YT intros and I love it.

[@patrickmelson4745]

Toby, it sounds like i could do a land trust for a wrap around purchase situation?

[@Ball_drips]

13:01 in this scenario are u leaving the original note the seller had on the property in place when u take over the trustee/beneficiary positions?

[@bastienclarke1810]

Great!

[@TobyMathis]

Thank you!

[@johnmaxwell1356]

I'm moving to Washington State. Any great tax professionals you might recommend up there? I know you might hesitate in making recommendations because of liability issues...but if no recommendation, what should I be looking for, questions asked, etc. when looking for a great tax accountant? Thanks in advance.

[@lovelyibanez2226]

Thanks Toby! How about if you own a land and make a glamping business out of it? Do you put each tent unit in a separate LLLC?

[@valerieleuba]

Can I use a VA benefit to purchase 2nd property and put it in a land trust?

[@Igrowyourbiz]

Is there benefit to doing SD trusts that are anonymous for the land trust?

[@sadiegirl5312]

Love ❤ your cat

[@raymondmartin3254]

How to convert a garage into a casita I don't want to use for long-term rentals. What I do a Land Trust on my main house both of them into an LLC separately

[@rchen404]

Aren't you required to provide info on your assets during discovery if you're sued?

[@lautburns4829]

Wow, I’m listening.. I just made a verbal offer on my first income property. I’m willing to pay cash. The owner is a NFP church fellowship. They like my offer because the property has flaws, it’s a mess, needs repair. No realtor involved. I don’t know how to proceed. Should I have an attorney make a contract, and make a LLC for me? ( upstate New York) thanks again for all the great content.

[@fgoldbuster]

What do you think about cd or gold and silver as collateral

[@richardgerwing5377]

Buying a new house and looking for rental property as well

[@DAT809]

build or buy existing property at this time? Fourplex etc

[@capncrunch2573]

Awesome video, Toby! I live and own a house in Cali, but I'm thinking of building a cottage on lake property I own in Canada, which I plan to rent out during the winter months. I'm a dual citizen, so does the LLC approach still apply to asset protection if the rental is outside of the US?... or would I need to set that up in Canada?

[@TobyMathis]

Thank you so much for your question! We highly recommend you join us at our next Free Tax & Asset Protection Workshop Livestream. Our attorneys and specialists will answer all your questions at no additional cost. Save Your Seat: aba.link/taptoby

[@shellycrosse4090]

Does this work for overseas rental properties?

[@corinatello]

Thank you. I have 3 clients buying each 3 units with FHA, so they'll be house hacking, str, and market rental. Ha. should they create 3 different LLCs all under the land trust. Thank you for this information, your channel is very educative!

[@corinatello]

we are in IL, too. Horrible Lanlord State... :)

[@TobyMathis]

Hi Corina, we recommend speaking with one of our advisors for any legal advice. Here is the link to schedule a free strategy session, bit.ly/3JbMhRP. Or you may call to speak with an advisor at our toll-free line, 800-706-4741.

[@avecinar9359]

Own rental 2 fam how to transfer to trust so I get medical

[@fredkerzic2568]

Sorry I’m late to the party… Is there an avenue for tax benefits with NNN investments?

[@fluffie6568]

Hi Toby, I currently have a home that I live in since 2017 and I’m thinking about having an ADU in it and I’m going to live in the ADU and rent out the main house. Can I change this to LLC even though I live in the ADU? Thanks!

[@TobyMathis]

Hello, we recommend speaking with one of our advisors for any legal advice. Here is the link to schedule a free strategy session, bit.ly/3JbMhRP. Or you may call to speak with an advisor at our toll-free line, 800-706-4741.

[@WellsMedia-ct9sf]

This was a great million dollar nugget. How can we setup a consultation T. Mathis? I need a land trust / private LLC in Florida.

[@TobyMathis]

Here is the link to schedule a free strategy session, aba.link/tobyss. Or you may call to speak with an advisor at our toll-free line, 800-706-4741.

[@23bushman23]

If I’m setting up a land trust for an Airbnb property, can the trustee and beneficiary be the same ie a Wyoming Llc ?

[@TobyMathis]

Thank you so much for your question! We highly recommend you join us at our next Free Tax & Asset Protection Workshop Livestream. Our attorneys and specialists will answer all your questions at no additional cost. Save Your Seat: aba.link/taptoby

[@wah-kengwu4483]

How about I live in a condo and plan to move out and use condo as rental and still have loan on it

[@Igrowyourbiz]

how about house hacking witha a multifamily?

[@gregoryunderwood4121]

Great video, thank you! So much to take in, I watched it 3 times. I'll probably watch it another 3 times

[@yigalgidasi5617]

I own a fully paid CO OP as my residence, I also have a rental CO OP apartment in the same building in NY state and a Condo townhouse in Florida. , all fully paid. Should I transfer my properties to a separate LLCs?

[@TobyMathis]

Yes, you should strongly consider doing so to protect yourself individually and each of the different assets from potential liability from each other! They will need to be separated and put into a proper structure though based on the state of the LLC. I recommend reaching out to one of our team members for a free initial consultation to discuss your specific needs in detail.

[@VasiliosKountis]

Gold.

[@jessicalelievre8493]

Hi, What does LLC stated for?

[@alvincash3230]

Limited Liability Company

[@hlim3487]

Toby, say you have opted not to set up an LLC for your first rental. I’m going to be renting my primary residence and move out while retaining my mortgage with my bank. Can I still realize the tax benefits?

[@TobyMathis]

You can if the property is held in a land trust/grantor residence trust. This will preserve your mortgage and the benefits. You will need to continue to claim the property as your primary residence to claim tax breaks associated with residence.

[@starr8111]

20:00

[@harutanaka3647]

Is it possible to do 50% 121 Exclusion and 50% 1031 Exchange on single property to reduce risk from market drop?

[@TobyMathis]

Thank you so much for your question! We highly recommend you join us at our next Free Tax & Asset Protection Workshop Livestream. Our attorneys and specialists will answer all your questions at no additional cost. Save Your Seat: aba.link/taptoby

[@PeterPyo]

man. this dude knows his stuff. (spoken as a noob to all this who knows nothing haha)

[@TobyMathis]

We hope our content proved to be an educational experience for you. We highly recommend watching more of our videos to learn even more.

[@wompol7117]

buying huge piece of land. cash sale. it can be subdivided into to multiple uses (one area with a few dozen small homes for daily use and midterm rentals, a venue in one corner, several businesses along one side with road exposure. remaining thousands of acres left pristine as sanctuary. how to structure?

[@TobyMathis]

Thanks for sharing your ambitious project! It sounds like you have a multifaceted vision for your land. Let's discuss how to structure your investment to maximize its potential while ensuring it aligns with your goals. I'd be happy to offer you a free strategy session to delve deeper into the details and explore the best approach for your unique situation. Sign up here: aba.link/pl3

[@Lt_Jordan93]

If I have a WY LLC with 2 members (married couple), the IRS considers it as partnership. Is there any difference for tax purposes than a disregard LCC. Will the couple still be able to move the taxes to personal taxes. Do I have to do anything to make it a disregard LLC. IRS website says there is an exception when the members are spouses. Thanks for your time.

[@TobyMathis]

Great question, to assist you further, I highly recommend you request a free 45-minute consultation to discuss this with my team so we can provide you with an answer that is unique to your situation. Visit: aba.link/pl3

[@starr8111]

14:35

[@albertcoral5986]

Great video. I like the Wyoming LLC to hide real estate. After 30 years of ownership for the benefit of depreciation it might be necessary to dump the LLC for a 1031 exchange and create a new one. How much does it cost to set up an LLC in Wyoming?

[@TobyMathis]

Hi Albert, thank you for leaving your comment. You can request a free 45-minute consultation to discuss our proven asset protection and tax strategies and how they apply to your unique situation. You can request it here! ----------> aba.link/tobyss

[@jackryan9587]

why put the first rental into a land trust and then assign no it to an LLC, as opposed to buying it with an LLC and then assigning it to your trust? does it matter either way?

[@TobyMathis]

Hey Jack! Make sure you join us on Saturday, February 25th -- Learn about real estate asset protection at our FREE Livestream Tax & Asset Protection Workshop where we'll answer ALL your questions. Get in: aba.link/taptoby

[@starr8111]

9:50

[@starr8111]

17:52

[@richricogranada9647]

I need to protect my only asset-my house. What is best asset protection?

[@TobyMathis]

Thank you so much for your question! We highly recommend you join us at our next Free Tax & Asset Protection Workshop Livestream. Our attorneys and specialists will answer all your questions at no additional cost. Save Your Seat: aba.link/taptoby

[@abbibrennen2549]

Dear Toby I am a fan, in fact, when you just now said, I know that is a lot, (for you all to digest, in a short video.) Whoa,, I was just thinking I am going to play this over a couple more times so I can thoroughly devour it, mentally and I probably am not going to do the Airbnb, anyway. Because I decided to go live in my Beach rental. and other property is long term. I will be sharing your name with who ever I can get to listen. But my experience is that even tho my family can see that building a portfolio of rental property is indeed building wealth long term. None of my family seems to be interested in long term wealth building. Your probably thinking, she must have a really dumb family! Guess so? Although only some of them, in my opinion.

[@gonzalolozano1196]

Did you know someone the know how do this structure on az ?

[@TobyMathis]

Our team can assist you in AZ as well. Sign up for a free consultation here: aba.link/pl3

[@rileyteulon6010]

I fuckin love this guy

[@shawmeck9323]

So llc for me then, got it 😂

[@karikasumi888]

I SAW on KZbin! 😖 Haha my lawyer 😒

[@financiallife3696]

I have heard from an attorney that it’s dangerous to have an umbrella policy because when an attorney searches you they see a huge jackpot to go after and know there is probably more. Ex: if your 16 year old son gets in car accident and it’s their fault and attorney sees you have $1M umbrella policy plus auto insurance. I am assuming you disagree because you talk about getting one. Is there any truth to it though?

[@NoOne-fe8qt]

The $1M in umbrella is not just sitting there. They will have to fight the insurance company lawyers to get the money. And the insurance lawyers know their business. For a landlord, an umbrella is a Must!! RLI insurance covers both personal property and rental properties in an LLC under a single policy.

[@ocean1233]

😂😂😂 Thanks Tobey😹 I have serious questions ❓ re: my property

[@TobyMathis]

Have you set up a free consultation? aba.link/pl3

[@donnalorranciewalton4031]

I received a quick claim I have the same name as the person who gave me the quit claim a few months later a letter came to me (I thought it was for me) and it was from an LLC broker in it she was adding her son on the paper apparently she's using it for Social Security business. I don't understand any of this what does this mean I'm afraid her son will come and kick me off the property she quit claimed to me should I be worried January will make a year and I can put it in my name legally should I be worried I feel like something is wrong

[@TobyMathis]

Hi Donna, thank you for leaving your comment. You can request a free 45-minute consultation to discuss our proven asset protection and tax strategies and how they apply to your unique situation. You can set it up here --------> aba.link/tobyss

[@TobyMathis]

If you are a platinum client with Anderson, I would recommend calling one of our attorneys on the helpline to go through this thoroughly and suss out all the details. That being said, anytime someone else is on title for property (or a member of the LLC that owns it) they have rights to that property, so unless this was planned you are right to be a little concerned and should reach out to the broker or a local attorney.

[@timfritch6735]

Toby I'm a landlord in Michigan what is the best way to contact you to get me set up properly ?

[@TobyMathis]

Hi Tim, thank you for leaving your comment. You can request a free 45-minute consultation to discuss our proven asset protection and tax strategies and how they apply to your unique situation. You can get set up here -------> aba.link/tobyss

[@jcorreia275]

You can't be the grantor, beneficiary, and trustee of your trust. You can only be two of the three. What's the difference in this situation?

[@socalcraigster]

Nice work as always Toby. I'm a California Estate Planning Attorney. Question - I want a job with Anderson Advisors. How should I proceed?

[@TobyMathis]

Here's a link to our career page andersonadvisors.com/ander-advisor-careers/

[@trioray9090]

How much to have a private session with you?

[@TobyMathis]

Here is the link to schedule a free strategy session, aba.link/tobyss. Or you may call to speak with an advisor at our toll-free line, 800-706-4741.

[@rchen404]

Some other lawyers have said, depending on state, that single member LLCs regularly have their veils pierced and that making it a partnership protects against that. Do you agree?

[@ToddTinley]

Just get insurance and skip all the LLC nonsense

[@projectamerica3638]

I want to hire you

[@TobyMathis]

My team can help. Sign up for a meeting here: aba.link/pl3

[@theliefilter6412]

I want to be a rockstar.

[@oliverpattondavis2419]

Please how do I get in contact with you?

[@TobyMathis]

Hi Oliver, thank you for leaving your comment. You can request a free 45-minute consultation to discuss our proven asset protection and tax strategies and how they apply to your unique situation. You can request it here! -----------> aba.link/tobyss

[@khanKhan-od3zn]

Where is my profity for example I have profity you give me

[@BossChronicles]

I have good credit how can i get funding no tax returns no proof of income

[@jrod7929]

DSCR loans would be your only option. It's the loan that just looks at rental income vs your payments. If there a positive, usually 1.3x, then they'll give you a loan. It's going to be a higher rate. But no income verification etc is a no go for most lending. Credit doesn't mean much if have no way to pay, in the banks eyes.

[@alunjones4494]

I'm

[@1999longhorn]

If my Airbnbs are professionally managed, can they then be considered passive income even though I’m considered a Real Estate Professional for my other LTRs since I do not have a W2 job?

[@jdeeezie]

It often seems like owning a rental property outright means that you are the most at risk of losing big. So even if the rental property is inside of an LLC, but that rental property has vested 100% at that point, well, you've got an LLC with a whole lot of assets in it that are open to risk if a settlement goes above the insurance ceiling. So would it be a good idea to do a cash out refi, pay yourself personally, and then go back to the process of paying the mortgage off over the next however many years. That way there's no more than 20 to 50% of the equity vested at any given time?

[@manoharmenghani6149]

So what is your contact #?

[@TobyMathis]

You can find our contact details on our website, andersonadvisors.com/

[@tompetzold869]

This guy plays four dimensional, chess in his sleep!!😅😅

[@kenmacphee7400]

Keep the utilities in your name, if the tenants stop paying rent the power shuts off

[@Fast_Eddie_]

If that's legal, it's genius lol

[@kenmacphee7400]

@@Fast_Eddie_ it happened to one of my employees in Florida. From what I understood there was nothing he could do about it but who knows?

[@sissys6284]

Doesn't work in Miami, FL. You cannot shut utilities off to non-paying renters. That leaves you hanging for the rent AND the mammoth utilities bills.

[@fmrp66]

We have revert to owner accounts setup with electric and gas utilities so if a tenant moves out or stops paying the utility moves back into the owners name. Then lease has a $100 fine for any tenant not moving utilities into their names or if it gets turned off and utility moves it to our name.

[@iriemabayo5939]

In Ohio even though you are renting the house the utilities is link to the tenant and if the tenant would not pay the owner pays through your tax

[@opaul7500]

At this rate, if something goes awry, you're up shit-creek!

[@joeydewitt4639]

Meow

[@ako849]

I’m I have a home mortgage $ 63,000,00 interest and principal $285 a fortnight $565 a month.

[@lisapurplehayes]

Did you just copy Graham Stephan and his showing a cute picture of an animal thing?

[@opaul7500]

*Is there something simpler please?* *_Like an idiot-proof,_*_ Real Estate for Dummies type, ABC, step by step, guide that doesn't require you to be a legal/accounting, IRS-conversant, mental acrobat Ninja? ...when the greatest level of complexity you have attained is how to determine where you left your keys!_

[@brodyllc]

that my friend, is a cute cat

[@youmayberight2434]

Thank you