Future & the Availability of Rental Opportunities

[Nef Ojeda]

Hey BP members, 

My wife and I are diving into this world of Real Estate investing (single/multi-fam or house hack) and we are studying and cramming as much information as we can and naturally we have a few questions. For some context - we are within 3 to 6 months of crossing over to the right side of the quadrant.  

A few of our questions below:

(1) How saturated is the market with what we perceive are many pursuing the same goal of REI?

(2) Let's say our first crack at this REI works really well and we want to continue growing our portfolio, (which is our intention) will it be more difficult during these turbulent financial times for a newbie to build a strong and steady portfolio in comparison to past economical downturns?

(3) When does one need to consider having an LLC?

The questions above are coming from a perspective of individuals who are not investors yet are on that path. So if the questions above are a tad unclear or misplaced we will accept all constructive corrections and opinions or a better redirection of what we were trying to ask.  

Thanks for your time and any support and expertise you can give.
:Nef:

[Katherine Serrell]

Hi Nef!

Congrats on your journey!

1. Depends on the market but there is enough pie to go around even in competitive markets where good deals are hard to find. If you have trouble getting started or scaling in your local market, you can always invest elsewhere. 

2. "turbulent financial times" are never-ending and there isnt a perfect market or perfect time to buy. When rates were 2.5%, people didnt want to get started because there was "too much competition" and they "didnt want to overpay" and now the same people are saying they dont wont to get started because "rates are too high" or "I am going to wait until rates fall again" etc etc etc. My point is...there isnt the perfect time to buy....you just have to buy what makes sense today with the decision-making knowledge you have available. That being said -  It is still a great time to get started... I just wouldnt get started with some luxury million-dollar airbnb and instead I would buy something more recession-proof (single family, multifamily,  househack, etc)

3. If you buy a house or multifamily to househack, you cant put it in an LLC since you are buying it with a residential loan as a primary residence. DISCLAIMER: I am NOT a lawyer but my understanding is LLC's only offer one "layer" of protection and honestly a good insurance policy/commercial insurance policy with an umbrella liability policy will do you more good than an LLC will. The only people who win when you open up an LLC for every property is your lawyer, accountant, and the banks. Any lawyer will tell you that ultimately if you do something grossly negligent, malicious, etc it doesnt matter if you have an LLC or not - its bad news. I personally didnt start an LLC until I bought my 4th property.