Frequently Asked Questions
Have a question? Please search below and we will do our best to assist you.
Nestment can connect you with third party lawyers who can support you.
Yes! You are able to adjust the purchase price in a listing's Nestimate to see what different selling prices do to the financial projection for a particular home.
Yes! Bring us your listing and we will help analyze it using our Nestimate modeling and data. We can help estimate what appreciation, costs, and rental revenue might be. Schedule a call with a Nestment co-buy planner to get started.
Nestment can provide you with analysis found in our Nestimates, but your dedicated agent will be able to walk you through how best to approach making an offer.
Yes! It might come as a surprise, but co-buyers don’t actually require any kind of specialized “group” mortgage to buy together. And you might even be better poised to make it happen with the involvement of your friends. In this type of situation, all borrowers complete an application, and the mortgage lender considers all qualifications of the co-borrowers, including assets, credit history and income.
No. Most first-time buyer programs require all applicants on the loan to be first timers. The purpose of those programs are to help people buy their own residence, not a second home/part-time rental. So, it really varies program by program as to whether first-time buyers would still be able to utilize that type of program here. If this sounds confusing, don't worry, our network of brokers can help your group find the best type of loan for your scenario and use case.
Of course! Your Nestment Relationship Manager can coordinate with your agent and help fill the gaps or address any questions your agent might have.
Of course! Your Nestment Relationship Manager can coordinate with your group's lender, even if they are not in our ecosystem.
While we get this question from other home buyers, we do not currently offer a match-making service. If this changes in the future we will notify you! Make sure to sign up and schedule a call with a co-buy planner regardless.
Of course! Our network of brokers are incredibly knowledgable with these programs and can tell you if they are applicable to your scenario and group. Visit this link.
Absolutely! Because each group is different, we recommend scheduling a call with one of our co-buy planners to explain how tax deductions might work and benefit your group.
We do not, but part of our service is connecting your group with several local management companies. Schedule a call with one of our co-buy planners to get started.
Nestment has a variety of tax experts and CPAs we can put you in touch with. They will be able to tell you more about taxes, deductions, and accounting for your particular scenario and group.
No, these are to be used as estimates only. Nestment does not guarantee listings will perform according to estimates.
Nestment does not own the properties on the platform. These listings come from regional MLS boards.
Each transaction has individual characteristics that should be discussed with a tax professional and we highly encourage you to do so whenever engaging in a property purchase or when making decisions pertaining to tax treatment of a property. We have tax professionals in our network that can walkthrough how best to take advantage of deductions.
With that said, in most standard purchase transactions, if an LLC is treated as a partnership for federal income tax purposes, the entity itself will not be subject to federal income tax. Instead, each member will be taxed on the member's allocable share of the LLC's taxable income. Generally, the character of an item of income or loss will be the same for a member as it is for the LLC. Each member of an LLC must take into account the member's distributive share of an LLC's income and loss as determined by the LLC's operating agreement, unless the operating agreement does not provide for such allocations or such allocations under the operating agreement do not have "substantial economic effect," in which case such member's distributive share will be determined in accordance with the member's interest in the LLC. In addition, income, gain, loss, and deductions with respect to contributed property must be allocated among the members to take account of any difference between the tax basis of the property and its fair market value at the time of contribution. A member will be entitled to deduct its share of an LLC's tax losses to the extent of the tax basis in its LLC interest. Any loss in excess of such tax basis may be carried over indefinitely and deducted, subject to various limitations (e.g., passive activity and at-risk rules), in any subsequent year in which the tax basis in such member's LLC interest is increased above zero.
Nestment's platform is currently free to use! Nestment does not cover a group's legal fees or partner fees if a group uses a third party in our partner ecosystem.
If any portion of our services become subject to a fee in the future, we'll let you know in advance and will require your consent.
Generally, Nestment recommends groups hold property together as an LLC (a limited liability company). In rare circumstances a TIC (a tenancy in common) is appropriate. However, you should always consult an expert before investing as your circumstances may be unique.
Nestment vets accredited lenders that specialize in lending to co-buy groups. Nestment does not operate on behalf of lenders in our ecosystem.
Nestment vets licensed realtors from our network of agents and brokerages across the country.
We recommend groups own property as a LLC, in which case gains/losses are passed through to the individuals of the LLC and filed with their personal returns.
Nestment's Relationship Manager and Research Associate will obtain this information for you.
There will always be unforeseeable issues you and your group will run into, but with organization, communication, and planning ahead you can do your best to plan for or avoid most of them. We recommend scheduling a call with one of our co-buy planners who can take you through our operating agreement in more detail.
There are multiple partners we work with currently at each step of the Nestment process, from pre-purchase (including Lenders, Agents, and Lawyers) to post-purchase (such as Property Managers). We create our partnerships first by working with companies that understand that co-buying is a powerful tool for driving property ownership and they want to be a part of the vanguard in figuring out the best ways to help the most people. We "vet" through a mix of using network referrals, reviews/research, and finding the companies who meet the needs of our unique customers. We're always looking for new, great partners so if you have any people or companies that you think we should connect with, please let us know!
Nestment uses the standard IRR formula to calculate rate of return. It assumes your group will short term rental your property.
Nestment uses a variety of data sources to feed standard formulas to calculate particular projections.
Nestment primarily makes money through referrals to our partner ecosystem when applicable.
Depending how your group sets up your operating agreement, there are a few common scenarios you can choose to implement.
As we mentioned, please consult a tax professional for all tax related questions, each person’s situation is unique and should be addressed as such. For most people, if you own a multi-member LLC, then the taxes may be handled differently.
You also have a few options for tax elections when you file your company with the IRS. Taxes are still passed through the LLC to the members; however, the members must complete a Schedule C, Schedule K, or Form 1065 with their income tax return. Each member of the LLC will claim their share of the income, not the entire income that the LLC earned that year. You might instead elect to have your LLC taxed as an S corporation or a C corporation for a different tax structure. Prior to setting up your LLC, we recommend discussing your personal financial situation with a tax professional to find out the best way to set up the company and to minimize your tax burden. One of the major benefits of having your property owned by an LLC is that you will be able to take certain deductions on your taxes that you otherwise would not be eligible for. Additionally, if you run your company out of a home office, you may even be eligible for other additional deductions, such as utilities, repairs and maintenance, or dwelling insurance costs.
Each owner should show their pro-rata share of partnership income, credits and deductions on Schedule K-1 (1065), Partner’s Share of Income, Deductions, Credits, etc. Generally, members of LLCs filing Partnership Returns pay self-employment tax on their share of partnership earnings.
This varies depending on the state you purchase in. We can help you find out about yours and give you a better idea of associated costs.
Nestment acts only as a referring broker and is not the broker of record for any transactions facilitated through the Nestment platform or related services. If you have questions about who the broker of record is for your property purchase, please refer to your sales agent or broker directly.
Buying property depends heavily on your personal finances and what you’re able to afford, especially if you're in a place to afford a down payment, closing costs and monthly mortgage payments. Keep in mind, real estate is one of the biggest generators of wealth individuals can take advantage of in their lifetime. We can help you analyze listings to project monthly and yearly costs it might require.
LLCs help with a number of things, including:
- Help protect individual finances and risk exposure. If you rent out your property and you get sued by a tenant, they will not be able to sue individual group members… just the LLC.
- Make finances easier. Open up a group bank account under the LLC to manage payments, reimbursements and payments from tenants.
- Streamline and reduce taxes. An LLC makes taxes more straightforward and reduces individual taxes. Instead of each member of your group reporting individual income from the property (typically taxed at 24%-39%), each individual reports income as capital gains (typically 20%).
- Make it easier to make equity changes. If someone in your group wanted to sell their stake it’s much easier and is handled through the LLC. Changes to clauses or ownership can all be handled through an operating agreement.
- Privacy. Tenants don’t necessarily have to know the individual names of the owners in the group. They just know the name of the LLC which can increase privacy.
That's a great question. There are many locations across the country that are seeing impressive growth from a variety of factors like job growth, construction, affordability, weather, and lifestyles. Explore cities on our app and see what places are currently predicted to have great appreciation and rental cashflow. You'll want to look at the "Nestimate" provided with each listing. Happy hunting!
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There are a few ways groups choose to handle selling. These are outlined in the group's operating agreement. Typically group members choose to elect a policy where any member can sell their share of the LLC, where the remaining members get first right of refusal. If no members want to buy the seller's share, the seller has a specified amount of time to find a new buyer that the remaining members approve. If no new buyer is found, and no members want to purchase the share, the property is sold.
Please note this is a high-level overview of the exact clause. There are also other details and other ways a group can elect to handle selling.
We've built this platform and ecosystem because many people want to do this but can't get past this part of the process. In fact, we have real estate agents who want to run through the Nestment product with their friends because they don't want to shoulder the burden of leading the whole group.
Common things included in a co-buy operating agreement:
- Financial responsibilities for fixes, maintenance, and upgrades.
- How the property will be occupied (rented, Airbnb, vacation).
- Selling criteria and stipulations (usually a first right of refusal).
- How taxes will be calculated.
- How the property will be managed.
As of November 2023, we have secured seed fundraising with runway for at least 2 years. We have commitments for our Series A.
Your lender is best equipped to match you with the best product available for your specific needs.
Nestment gets its listings from certain MLS boards across the US. We are actively working to include more regions and more listings.
We purchase data from some of the world's best, most accurate real estate data providers to power our Nestimate projections.
You might see listings available on other real estate sites but not on Nestment. This is dependent on licensed access to MLS boards across the US. We are working to secure access to more MLS boards in order to provide more available listings for our users.
You can certainly file your own LLC and create an operating agreement on your own, but when you do it through Nestment, and our third party experts, you get peace of mind knowing the majority of future scenarios are outlined and covered. You can also access our legal partners to customize your operating agreement and tailor it to your group's preferences.
We can't predict what will happen with interest rates in the future, but if they do fall you will typically be able to consider refinancing. We recommend addressing this with your lender who happy to help plan for future changes.
You'll buy the property under your own names and we'll guide you through the process of contributing the property to your group's LLC.
We will help you! All groups have different needs. We have a post-purchase checklist that will help us determine what you need and make a plan from there. The most basic aspect that we'll help with is finding the right property manager and, if necessary, help determine additional requirements to list the property as a Short Term Rental (STR) or Long Term Reantal (LTR).