Looking for advice

[Kelly Bettendorf]

Hi, my name is Kelly and i'm new to biggerpockes and investing in property.

To start out let me say I have been reading the book on investing in real estate with no money down. it has really helped answer a lot of my basic questions on were I am today.

A little background:

In December of 2013 I got my first property in Oregon, A owner occupied duplex which i used a FHA loan as a first time home owner. I paid 160,000 for the property and today it is worth aprox 208,000 zillow estimation not counting some major remodel improvements, full gut job on 1/2 new kitchen, floors etc. The property was purchased under my name and I am now looking at refi for two reasons. first to get out of the FHA loan were im paying the extra fee due to not paying 20 % down. 2nd Im looking at creating a LLC in Oregon and refinancing the property under the business name.

In the last few months ive gotten married and moved cross country to the Maryland area for a new job, and we are currently renting as we are getting to know the area and will be looking at the possibly of another likely owner occupied multi family property. our current window were shopping is to try to identify a really good deal in the next 9 to 12 months. 

At this current point, we have little cash assists and are looking at options of using the equity of our duplex as a source of funds for our next buy.  

Im in my early twenty's and looking to get any advice to better build my knowledge for going forwarded. At this point i am looking to attend some auctions in my new area to get hands on experience on what to expect when were ready to buy. Currently I have a goal of accumulating a total of 5 properties in the next 5 years.  

To my questions:

Would you recommend refinancing the property in Oregon to get off FHA and move to a fix 30 year under a LLC name?

Do you know if I need to create two LLC's for each state or would it be better to look at a foreign LLC registration?

Any other advice or comments would be welcomed.

Thanks

Kelly.

[Kent Verge]

Welcome Kelly!

Why do you feel that you need to move the duplex to an LLC? Likewise, why do you feel that you need an LLC in Maryland?

My recommendation would be to just keep them under your name at least until your CPA tells you it's time for another entity. The LLC will add extra costs both up front and at tax time, and unless you follow the operating guidelines to the letter, any perceived benefit in terms of risk is weak at best.

Kent

[Kelly Bettendorf]

Kent,

The biggest reason i was looking at going with an LLC was because my understanding that if something were to happen i would be better protected. say a tenet try to sue me etc.

On a side note I recently setup a umbrella policy to minimize my risk in the case of an accident or other potential issues. 

Thanks for your response. 

[Kent Verge]

Originally posted by @Kelly Bettendorf:

Kent,

The biggest reason i was looking at going with an LLC was because my understanding that if something were to happen i would be better protected. say a tenet try to sue me etc.

If you don't follow all of the correct processes for an LLC (documented regular meetings, separation of funds/expenses, etc.), an attorney working for someone suing you could pierce the LLC quite easily anyway. Those things are hard to do correctly as DIY without some form of professional guidance.

[Stephanie Dobbs]

Hi Ms. Kelly,

Welcome to BP and Maryland! I've been living in Maryland for just under 8 years, and I love the state! It's a very diverse place, and offers a lot especially in terms of real estate! I don't have the answers to your questions, but wanted to take the time to welcome you to this great site, and to communicate with a fellow Marylander. I hope to connect with you soon!

Stephanie