Denver Based LLC Operating in Arkansas

[Ben Biggs]

Hey BP, 

I have a unique situation I need a little help with, 

I'm living in Japan right now, and will be until May 2016. I'm moving back to Fort Collins, CO when I return to the U.S. to attend Colorado State University.

My goal is to acquire 5 single/multi family homes as rentals in and around Conway, AR, while I'm still in Japan. The reason for doing this is because my father lives near Conway, and it is the closest population draw near him. He has agreed to manage the properties for me. He has detailed knowledge of home construction, has a background in real estate, and I believe he will be good at it. 

I'm getting ready to start my LLC using LegalZoom right now, just so I have an entity to go to banks with, I plan on using my Credit Union for financing, which I have been using for four years and have a great relationship with, or potentially going to local portfolio lenders in Conway.

Ok, here's the question: does anyone have experience using an LLC to buy properties in several states, and/or putting deals together long distance?

My criteria: Single family/Multi Family in move in Condition under $100,000 in Conway proper or within 30 minute drive. 

This is going to be my first deal, and It's going to be difficult to manage, but I believe i will be better off if I push through and make some deals now. My eventual goal is to buy up enough cash flowing singles and multi's to provide collateral for large commercial units. Once I return to the U.S. I will begin investing in CO and will either continue to use my Father (who is retired)  as the manager or hire it out, and fly back a couple times a year. 

Cheers, 

Ben

[Jean Bolger]

Talk to the lending person at your credit union before you make too many plans. Many of them don't lend out of state. It's not about the strength of your relationship with them in that case - it's just not within their purview. So you'd probably be looking at either a national lender or a lender that was local to Conway.

The advice above about LLCs is all good. But no, you don't need an LLC to prove you're "serious". IMO the LLC thing is way over-hyped to beginning investors- as if filling out the paperwork and paying that fee is somehow an initiation into the mystery club of "real investors". But it's often just busywork and unnecessary expense. The truth is that, if you are starting with SFRs, you'll need to get those first properties in your own name and you will need to be personally responsible for the loans. Even if you should find a bank that will allow you to borrow as an LLC -- at a higher interest rate, no doubt -- you'll still be personally guaranteeing those loans, so what's the point? (and if your answer is "asset protection", you'll be wanting to get your self a strong umbrella liability policy anyway that covers you up to your net worth plus a bit - that will take care of any asset protection you'd need for now)

Building a reputation for a business name is a fine idea, but it doesn't have to do it as an LLC. "Biggs Properties" on your business cards is just as good a name as "Biggs Properties, LLC".