Tax advantages for companies in Delaware

Delaware offers a variety of tax incentives for companies wishing to locate there.

Fact 1: No state corporation tax for companies without a physical presence

One of Delaware’s biggest advantages is that companies that operate outside the state and do not have a physical presence in Delaware are exempt from state corporate income tax. This is particularly advantageous for companies that operate on the Internet or have multiple locations in different states.

Fact 2: Low franchise tax

The franchise tax in Delaware is relatively low compared to other states. Businesses can choose how they want to be taxed based on their capital or stock. This offers flexibility and potential savings for businesses.

Fact 3: Protection of the corporate identity

Delaware has laws that protect the identity of business owners. This can be an advantage for investors who value privacy and do not want to make their personal information publicly available.

Delaware: Situation in the USA

My recommendation for the first 10 properties

For the first two to ten properties, an LLC (see GmbH in Germany) is best suited to minimize liability risks and at the same time take advantage of tax benefits. The LLC limits the personal liability of the owners, while profits and losses are attributed directly to the shareholders, which avoids double taxation. In comparison, a Limited Partnership (see KG) offers more flexibility in terms of passive participation, but the general partner bears full liability. A general partnership (see OHG) involves higher risks due to unlimited liability.

• More about the LLC
• All US legal forms

US-Firmengründung speziell für Tax-Lien-Investoren

• Gründung einer LLC oder Corporation
• Registered Agent Service (gesetzlich vorgeschrieben)
• Geschäftsadresse
• Postservice

• US-Firmengründung

Real estate ownership in Delaware

Delaware is also an attractive location for real estate investment, and the tax advantages make buying property there particularly attractive.

Fact 1: Low property taxes

Property taxes in Delaware are relatively low compared to other states. This makes owning real estate in Delaware economically attractive for investors and property owners.

Fact 2: No inheritance tax

Delaware does not levy inheritance tax or property tax, making it an ideal location for buying real estate for assets and estate planning. This is particularly advantageous for German investors who wish to own real estate in the USA.

Fact 3 Rental yields

Delaware offers a growing demand for rental housing, especially in cities like Wilmington and Newark. Investors can benefit from attractive rental yields while taking advantage of the state’s tax benefits.

Tax advantages for German investors in Delaware

For German investors, Delaware offers unique advantages that facilitate real estate ownership and business start-ups.

Double taxation agreement USA / Germany

The USA and Germany have a double taxation agreement that is designed to prevent German citizens from paying taxes on the same income in both the USA and Germany. This enables investors to avoid double taxation and make their investments more efficient.

Access to a stable market

Delaware has a stable economy and attracts many international investors. German investors can benefit from a dynamic real estate market and a diverse business environment.

Support from local authorities

Delaware has programs to support foreign investors, helping them to settle and establish their businesses in the state. This can be done through counseling services and networks specifically geared toward foreign investors.

My Delaware tax conclusion

Delaware has established itself as an attractive tax haven for businesses and investors, especially for German citizens. With its favorable tax system, absence of inheritance taxes and low property taxes, the state is an ideal place to own real estate and start a business. If you are a German investor looking to become active in Delaware, it is advisable to learn about the specific requirements and benefits and possibly consult a professional to make informed decisions.

Delaware or Florida: Tax comparison

Delaware and Florida are both attractive tax havens in the US, but with different advantages. Delaware offers companies no state income tax on profits earned outside the state and minimal reporting requirements, making it ideal for holding companies and shell companies. Florida , on the other hand, does not impose a personal income tax, which is particularly attractive to individuals and real estate investors. However, companies in Florida do pay a state corporate income tax, unlike Delaware.

My conclusion: Both offer tax advantages, but Delaware is better suited for companies, while Florida is more interesting for private individuals.

Where to set up? More about:

• Florida as a tax haven

Legal forms USA: Foundation & real estate

What types of company are there? If you want to set up your first US company, choosing the legal form is one of the first steps in the company formation process. Whether you want to set up a special real estate company or a start-up, we have summarized all types of companies in the USA for you here – with extra tips for real estate investments, of course.

• Legal forms USA

Share costs, maximize profits

Why you should invest in a condo? They are the key to higher returns, especially for the first investment

When it comes to investing in real estate, the choice between a condo and a house is crucial. A big advantage of a condo is that you become part of a community of owners. This means that most common expenses are shared. Let’s say you need to replace the heating system in your property.

If your first investment is in a condominium in a building with eight parties, you pay only 12.5% of the total cost. For example, if the replacement of the heating system costs €10,000, you will pay only €1,250 instead of the full €10,000.

Example calculation: Cost sharing WEG

A small sample calculation to illustrate how costs can be divided for a condo versus a house:

In this example, as a homeowner, you have to pay the entire €10,000 cost of repairing the heating system. As the owner of an apartment in a condominium, on the other hand, you only pay your share, which in this case is €1,250 (12.5% of the total costs). This illustrates how costs can be shared in a condominium, which can lead to significant cost savings compared to a house.

Condominiums: The key to optimized return and cash flow

This financial structure can make a significant difference in your investment returns and cash flow. It’s a powerful lever to maximize your investment potential. By choosing a condo, you’re not only investing wisely, but you’re also ensuring efficient cost allocation and potentially increasing your overall return.

Smart investments in real estate

Understanding the advantages of a condominium

The decision to invest in real estate is an important consideration, and understanding the benefits of condominiums can help you make a choice that meets your financial goals. Whether you’re a seasoned investor or new to real estate, remember: shared costs can have a significant impact on the outcome of your investment. Invest wisely and watch your cash flow grow!

If you want to learn more about the benefits of condos, follow me Lukinski YouTube now!

Selling an apartment privately or with an estate agent?

Let’s start with the most important question for salespeople. Both are possible, it depends on your time. Let’s take a look at the advantages and disadvantages.

Selling an apartment without an estate agent: the DIY challenge

Can you sell an apartment without an estate agent?

If you decide to sell your apartment without the help of an estate agent, you will need to be prepared for an intensive and time-consuming phase of work on your own. The process includes steps such as valuing the condominium, determining an offer price, compiling documents and records, creating an appealing exposé and taking photos. You will also need to familiarize yourself with online portals, communicate with potential buyers, distinguish between genuine interested parties and the curious, and conduct preliminary discussions.

You have time (and nerves) for the preparation and sales process

However, this is just the beginning. You will also need to carry out credit checks to ensure that potential buyers are able to finance the purchase. There will also be a large number of viewings, which can be time-consuming. Finally, you will also need to engage in negotiations, which may continue until the purchase contract is signed and the notary appointment is held.

Decide to sell without an estate agent if:

• You have sufficient time and patience for the entire preparation and sales process.
• You are prepared to deal intensively with the real estate market and the legal aspects of the sale.

Selling an apartment with an estate agent: professional support

Should I hire a real estate agent?

Alternatively, you have the option of hiring a real estate agent to sell your home. This can be an extremely beneficial choice, especially if you want to save time and avoid the stress that often comes with the selling process.

If you want to save time and spare your nerves, hire a real estate agent. It’s as simple as that.

By hiring an estate agent, you delegate most of the above tasks to a professional. The agent will evaluate the property, set the optimal asking price, create a professional exposé, take high-quality photos and present the apartment on various online portals. He or she will handle communication with interested parties, select only genuine potential buyers, carry out credit checks and organize viewings.

Decide on a broker if:

• You want to save your valuable time and still secure professional expertise in the sales process.
• You want to benefit from the market knowledge and negotiating skills of an experienced real estate agent.

Overall, there is no universal answer to the question of whether you should sell your home privately or use an estate agent. It all comes down to how much time, commitment and expertise you are able and willing to invest in the selling process. Regardless of your decision, it’s important that you do your research and choose the option that best suits your individual needs and goals.

Costs: buyer, seller and distribution

The costs for a real estate agent in Germany can vary, as they depend on various factors such as the region, the value of the property and the individual agreements with the agent. There are basically two types of estate agent commission:

1. Buyer’s commission: This is paid by the buyer of the property
2. Seller’s commission: This is paid by the seller of the property
3. Cost sharing: Usually half of 3% to 7% of the purchase price in each case

Purchaser principle in brokerage law

Since December 23, 2020, the so-called buyer principle has been in force in Germany under real estate agent law. This means that the person who commissions the estate agent pays the commission. In the case of apartment sales, this usually means that the seller pays the commission. In the case of apartment rentals, the costs are usually borne by the person who commissions the estate agent, i.e. either the landlord or the tenant, depending on the agreement.

Commission is negotiable

The exact commission amounts are negotiable and there are also estate agents who work with fixed lump sums. The costs can also vary depending on the estate agent and the individual agreement. It is therefore advisable to find out the exact costs and conditions in advance and obtain several offers before deciding on an estate agent.

Checklist: Find a reputable broker

Use this checklist to find reputable real estate agents in your area. And if in doubt, as you know, just write to me or give me a call: Contact.

Aspects	Recommendations
Research and recommendations	Research online and look for local advertisements. Get recommendations from friends, family and acquaintances.
Experience and expertise	Ask about the broker’s experience and how long they have been in the industry. Ask about similar transactions in the past.
References and reviews	Ask for references from past customers with similar transactions. Search online for customer reviews and feedback.
Local market knowledge	Make sure the agent knows the local real estate market well.
Professionalism	Pay attention to professional appearance, communication and punctuality.
Services and benefits	Clarify exactly what services the estate agent offers. Discuss the preparation of exposés, organization of viewings, etc.
Transparency with fees	Ask about the broker’s commission or fee structure. Ask for the costs to be set out in writing.
High-quality network	Ask about the estate agent’s network of prospective buyers and investors. This can make the sales process easier.
Chemistry and trust	Choose a broker with whom you have a good personal relationship and whom you can trust.
Comparison and selection	Obtain several offers from different estate agents and compare them. Make your decision based on facts and references.

Book real estate coach or not?

Just google “real estate coaching”, you will get ads and hundreds of websites that want nothing but your money! You can see that already in the structure of so-called landing pages. These are websites that offer hardly any info, but only a “button” to “enter”, “buy” or to “get free info”:

Here you will learn:

1. Recognize serious (unserious) coaches
2. You get 3 concrete tips for good coaches

For:

• Real estate beginners
• Homeowner:inside
• Entrepreneur:inside
• Financial freedom and passive income
• Real Estate Sales
• …

Coaching for entrepreneurs – example

An example instead of a thousand words – If you already turn over 1 million euros a year and instead of ~ 25% you only pay ~15% tax, through the right legal form and corporate structure, such as family foundation, the effect is enormous.

• 1 million turnover, 100,000 profit at 25% = 25,000 euros tax burden
• 1 million turnover, 100.000 profit at 15% = 15.000 Euro tax burden ( 10.000 Euro more profit / year )

If the costs of coaching are now 2,000 euros for 1 day in a master class – why not! Scaled to 5 million turnover, assuming 500,000 euros profit already 50,0000 euros more at the end of the year.

A simple example! If we stay here, other benefits are added such as allowances, etc..

Now you are probably already starting to rake!

It doesn’t always have to be the Masterclass, but you should pay attention to a few things to find good and reputable real estate coaches. Or you can just have a look at my recommendations.

Coaching for beginners: learning to get started

The most blatant experience I’ve had myself was in Berlin, a 21-year-old Teinehmerin. She had previously set up a fund in Switzerland, and now she wanted to get into the real estate business. Extremely interesting person! She then started as a tipster, so without investing or brokering herself. Now she is 22 years old and has built up a wealth of knowledge and asks punky questions, wow. Whether it’s BGF calculation, tenant lists, and skepticism of overly generous calculations. Impressive what becomes possible with the right ambition and training.

Real Estate Coaching in Germany

Here you will find once again my list of recommendations in Germany:

• Alex Fischer – my allround tip
• Real Estate Coaches

Serious real estate coaching: What to look for?

For me there are only two quality criteria

1. experience

2. success

Why does success come second? Anyone can have a “one trick pony” that you can talk about for years. But who creates continuous success? Here you can find good coaches.

Experience and success count!

How do you find good real estate coaches? These are my 3 tips!

1. Tip – Participant voices in quantity and quality
2. Tip – North Data Online Check in 1 minute
3. Tip – My Coach Recommendations

Participant comments: Quantity and quality – Tip 1

Trust in what? Participant testimonials are good, but they can also be fake, especially if it’s purely text-based.

• Many participant voices
• Ideally in video format with clear name
• On the spot from coaching or after, not only from “home”.

Falsify opinions of participants: This is how it works

I myself am an SEO, so I (also) deal with online marketing and search engine optimization. Nothing is easier to “fake” than opinions of participants. Especially now with AI (artificial intelligence) and programs like ChatGPT.

Example?

These aren’t real reviews, but they look convincing! Especially if you do not expect it.

“My name is Markus and I booked the real estate coaching a few months ago. I had already bought my first apartment and wanted to learn how to scale my real estate portfolio. The coaching was absolutely amazing! The coach helped me optimize my strategies and showed me how to successfuly invest in more condos. Thanks to the coaching, I was able to grow my portfolio to 12 condos and exceed my financial goals. I am so grateful to the team at Online Coachings for Real Estate and highly recommend them!”

Sorry for the long example, but that’s exactly how it goes!

So, what to do?

North Data Check: What can your coach do? – Tip 2

Tip, just check the person with North Data. Here you can already see whether it is, for example, a sole proprietor or a person with several companies, ideally also asset management or real estate GmbHs or family foundations.

This is what you should look for when checking:

• Extensive structure, not “just” a UG or GmbH
• “Real estate limited companies” (asset management for real estate)
• Asset Management
• Family Foundation

Background check online: 2 examples

The more professional and comprehensive the setting, the better.

Example: Small entrepreneur, “only” a UG.

Solid real estate investor with smart corporate structure and investments:

Advantages and disadvantages

Let’s honestly summarize again the advantages and possible disadvantages (depending on the coach you work with), the pros and cons:

Check: How to find good real estate coaches

Let’s summarize the 3 tips once again:

1. Tip – Participant voices in quantity and quality
2. Tip – North Data Online Check in 1 minute
3. Tip – My Coach Recommendations

Example: thousands of participants, huge community (100,000+) can’t be wrong (photo: Alex Fischer Event).

Real Estate Coaching in Germany

Here you will find once again my list of recommendations in Germany:

• Alex Fischer – my allround tip
• Real Estate Coaches

Sell apartment house: complete or each apartment separately?

When it comes to selling an apartment building, there are several ways to do it. One possibility is to sell the entire building as a unit. Another option is to divide the building into individual apartments and then sell them separately. Both options have advantages and disadvantages that must be considered when making a decision.

You have these two options:

1. Sell entire property
2. Sell individual apartments

In most cases, owners decide to sell the entire property.

Advantages & disadvantages of a complete sale of the property

If you decide to sell the entire apartment building, the sales process is much less complicated for a complete sale. After all, it is easier to find a buyer for a complete building than for several separate apartments. At the same time, complete apartment buildings are less in demand than individual apartments or single-family homes, since apartment buildings are usually only of interest to capital investors and investors.

However, selling the entire building can also fetch a lower price because the buyer bears the risk of taking on potential vacancies and rental problems.

Here are the pros and cons:

• Advantages: Easy & fast sale
• Disadvantages: Low retail price

Therefore it is worth dividing the apartment house

In comparison, dividing the building into individual apartments can increase the selling price. Since each apartment can now be sold separately, it may also be easier to find a buyer for it.

However, the disadvantage of this is that the division of the building into separate apartments may involve additional costs, such as the construction of partition walls and the installation of separate utilities. In addition, you should allow enough time in advance, as a division of the apartment building must be carefully prepared and processed.

• Advantages: Increased purchase price & many interested parties
• Disadvantages: Cost and time intensive

Even if a division into several apartments requires a lot of resources, it can be worthwhile to divide the house into several ownership shares. To ensure that this works smoothly, you have a few things to consider.

Divide apartment building into individual apartments

In order to divide the apartment building into individual apartments and sell them separately, you need to take certain steps. We will now take a closer look at how this works.

Certificate of Completeness by Building Inspectorate

If an apartment building is divided into several condominiums, a condominium owners’ association (WEG for short) is created. An important prerequisite for this is the existence of a certificate of self-containedness in accordance with the German Condominium Act (Wohnungseigentumsgesetz). This certificate is issued by the responsible building supervisory authority and confirms that the individual apartments are self-contained. This means that they have a separate, lockable entrance, their own ceilings and walls, and their own WC.

These conditions must be met for an apartment to be considered locked:

• Separate, lockable access
• Own ceilings & walls
• Own WC

Partition plan via architect or engineer

In addition to the certificate of separateness, you also need a partition plan of the entire building. This plan is an important part of the declaration of partition and shows how the building will be divided.

The most important information about the distribution plan at a glance:

• Is additionally required
• Shows division of the building
• Includes location & size
• Creation by architect or engineer

It must be prepared by a competent architect or engineer and indicate the exact size and location of each dwelling.

Notarization of the declaration of division

Once you have received the certificate of seclusion and the partition plan, you can prepare the declaration of division. This states that each owner will convert his or her property into co-ownership shares corresponding to the share in the entire residential complex. The declaration of division must be notarized to be legally effective.

Land register entry of the co-ownership shares

Finally, you must make the entry in the land register to secure the co-ownership shares. This is usually carried out by a notary, who draws up the title transfer deeds and applies for the entry at the relevant land registry office.

Once this step is complete, you can sell the apartment in question. But what happens to the tenants after the sale?

This is what needs to be considered: Right of first refusal for tenants

If you convert an apartment building into individual condominiums and sell them, you must bear in mind that the current tenants have a right of first refusal. This means that the tenants have the opportunity to purchase their current apartment on the same terms as agreed in the purchase contract between you and another buyer. The right of first refusal serves to provide the tenants with a certain degree of security and to ensure that they cannot be kicked out of their apartment without further ado.

However, it is possible that the tenant will not exercise his right of first refusal. In this case, you can sell the apartment to another buyer who is willing to fulfill the conditions of the purchase agreement.

Protection against dismissal when selling a house

In addition, according to the German Civil Code (BGB), the buyer is bound by the existing leases. This means that tenants retain their leases even after the house is sold and do not have to fear that they will be terminated.

So if you intend to sell the individual apartments in the apartment building, you must observe a notice lock-up period of at least three years. During this time, the new buyers cannot simply terminate the rental agreements.

Tip: To avoid potential conflicts between buyers and tenants when selling a house, you should include binding regulations in the purchase agreement. These regulations should refer to outstanding rent claims, operating cost payments and deposit repayments.

In summary:

• Buyer is bound by existing leases
• Termination of tenants after sale not possible
• Termination lock period of 3 years
• Tip: Record all formalities in the purchase contract

Conclusion: multi-family house apartments for sale individually

The decision whether to sell the apartment building as a whole or divided into individual apartments depends on various factors, such as the condition of the building, the location and the demand for housing in the area. If you decide to divide the apartment building into individual apartments and sell them, you can look forward to high sales prices. At the same time, it is important to consider both the tenants’ right of first refusal and the protection against dismissal.