Pennsylvania experts! Need your advice for this first timer 🤓

[Claire Lee]

Hi BP family! 😄

I am new to BP, been listening to the podcast religiously since I found out about it a couple months ago. Trying to immerse myself in REI as much as I can by reading, listening and watching whatever's floating on web. I've finally decided to take a baby step into the world of REI!

Ideally I would want to start my journey in my city but I currently live in NYC (yes, paying stupid amount on rent), so I've looked few out of States, and right before I get completely paralyzed, I just decided on Pennsylvania and determined not to look back! (At least for the first time, I want to be able to experience majority of the process in person - hence picked a state that's in driving distance).

Been reading random topics very shallowly 😅, then vaguely came up with some plans. Please feel free to comment / answer any / all of questions below, and enlighten me with your expert opinions!

1) Should I register for a corporate to start? (planning on building my RE empire eventually 😎) I've read something about transfer tax, wouldn't want to be taxed twice! If so, what entity?

2) Currently looking around Allentown - Bethlehem - Easton areas (thanks to podcast ep 276, 442), are they suitable markets for multifamily units? Something like a duplex to start, maybe a B class property (I honestly don't know exact distinctions of each class, but definitely want something safe in exchange for less cashflow at least for the first time). If I am looking at the wrong areas, please suggest others!
3) Lastly, what else do I have to ask? What should I look into? any advice is welcome!

Thank you so very much for your time, I will be sure to pay back with my time once I get to the expert level of knowledge and experience. 

-Claire ✌🏻

 p.s. am i posting it on the correct forum/discussion thread? this website is a little hard to navigate through 😅

[David Krulac]

@Claire Lee 

1.imho Corporations/LLC are oversold. I think you find the property first. Most people don't recommend the corporation for rentals because of the doble Federal taxation. S corp and LLC are preferred, and LLC are less cumbersome. And YES, Pa will chrge you transfer tax if you transfer property from you to your corp/LLC or vice versa. And YES, insurance companies charge higher premiums for corp/LLC ownership than they do for individually owned property, and YES some lender will either not lend to corp/LLC, particularly new entities with no credit history. Other lenders will lend but may charge higher interest or fixed for shorter period. For example you mat be as low as 2.5% fixed for 30 years, with no balloon as an individual, but I haven't seen any commercial loans with those terms, unless you're borrowing from your grandmother.

2.  Personally I invest in the fastest growing county in PA. (Cumberland County) and don't invest in ABE (Allentown Bethlehem Easton areas).

3.  For new investors, I always say:

a.  Look for positive cash flow properties

b. appreciation is icing on the cake, don't by negative cashflow properties just becase of some speculation of appreciation in the future.  Noboy knows the future.

c.  unless you are independently wealthy, borrow as much as you can for as long as you cab with the lowest down payments you can.

d. don't buy properties that are total wrecks or in bad, crime ridden neighborhoods.

e.  I like starting with single family, duplexes and small apts up to 4 units that can be financed residentially and owner occupant.

f.  Flipping can make you rich, but buy and hold will make you wealth.

g.  Ihope you ;isten to my Bigger Pockets Podcast # 82