I live in Los Angeles and I am pretty liquid. This is a two part question and I hope someone can guide me in the right direction.

1) I am looking to buy Single Family Homes in Cleveland, OH to rent to Section 8. With average price of $70-$85k, I am considering either buying 10+ all cash or by using DSCR loans. With interest rates at an all time high, I am wondering if I should buy all cash at the moment, wait until rates go down, and refinance OR should I just jump into DSCR loans immediately so that instead of i.e. 10 units, I can get i.e. 30 units instead with less down.

On a $75k purchase, an 8% interest rate vs a 5% interest rate isn't much difference, so I'm leaning towards DSCR loan vs my own money. However, I've spoken to a lot of lenders and closing costs end up being like $4-5k (which is a big chunk of a $75k purchase). Any advice on which way to go with this?

2) On the legal side, since I live in Los Angeles, I don't know how to structure property out of state. If I buy in my personal name, I don't have to deal with franchise tax ($800/yr) for an LLC. However, I am opening myself up to risk for lawsuits, etc. And if I have 20 properties in 10 different LLC's, that adds up and kills a lot of rental profits (10 x $800 = $8k/yr).

However, from some pros I've talked to, in order to avoid paying taxes on LLC's out of state as a California resident, I need to open up a Wyoming Statutory Trust, which leads to a Wyoming Holding Company, which leads to each Cleveland LLC. And the quotes I got for setting up these structures is like $10k. Though I have the money to pay for this structure, I am new to investing and I don't want to jump into creating these expensive structures when I'm not even a 100% sure I'm going to scale in Cleveland. Who knows what happens after I buy my first couple rental properties?

I just want some guidance on how to quickly start, get my feet wet, and make the bigger choices later on, when I start stacking rentals. Im in analysis paralysis and it isn't allowing me to make a decision. Can I just create a quick OHIO LLC, and purchase a property? Do I just buy in my personal name?

Thank you in advance and I apologize for the long post!

Cleveland, Ohio

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