Looking to start passive income through BRRRR or Rental.

[Chad Dunham]

Hello everyone, my name is Chad Dunham and I live in Eureka, MO.

Background intro: I am new to investing, although been interested since 2004. Unfortunately, life's obstacles have gotten in the way, until now. I am 43 yrs. old, married, 4 kids, work full time, have a decent savings ($20k), available credit cards ($90k), two 401k accounts ($75k), a pension ($115k) and 800 credit score. Just a few of my goals are to leave my current job, (Data Center Supervisor) hopefully sooner than later and become a full time Investor, accomplish Financial Freedom with a passive income, build a large portfolio for retirement and have a business to hand off to the kids. I have a strong drive to succeed, as failure is merely a learning curve.

1. 1. So above I listed most of my current assets, leaving out home, RV, cars, etc. Should I get an LLC to protect them now, or can I wait and how long?

1. 2. I currently own a 3/3 SF home. Bought in 2010 as a short sale with an FHA (+MIP). The house was originally listed for $210k, on the market for around 6 months eventually dropping down to $198k. I offered $165k and agreed on the counter of $177k. I currently owe $143k @ 3.25%. We are ready to move into another home out of the subdivision and back into the country. I would like to start the process here with the current home by renting it out. So, I have used the BP calculators for BRRRR and Rental and ran the numbers several different ways. I'm not sure which one I should be using. In one aspect I think BRRRR because I bought the property with some distress and since got a HELOC and fixed it up. But, in another aspect I look at it as money already spent and think I should be using the rental calculator. Either way, I would think this is a good start as I already have around $80k in equity and the mortgage almost half paid for. Also, do I keep the HELOC @ 6% and use it for more deals or refi the loan, take out the equity and use (1031) for more deals?

1. 3. With the available money I have, should I use it for my next deals? (obviously the credit cards are worst case as interest is so high) Should I roll my 401k's and pension into a Roth IRA and use only for Real Estate so I can benefit from not paying taxes if I always own the property (buy & hold)? Or is it just better to leverage OPM and protect all my assets under an LLC?

Any advice or constructive criticism is greatly appreciated.

Thanks, and stay safe out there.

[Craig Sloan]

@Chad Dunham I'll just address the issue about the LLC. I would say YES. You have worked hard to put yourself in a good financial position. In most states an LLC can be formed easily and inexpensively. In my opinion it is well worth the time and money for the protection it should offer. It would be a shame to see you lose what you have worked so hard for if something went well at a rental property. Good luck. Keep moving forward.