First Deal - Advise - Hard Money / Private Lending

[Ben Naughton]

Hello BiggerPockets People,

I have been studying the information on this site and reading the forums for a few months now. I've also been reading quite a few books, attended a REI seminar, and been talking to others trying to gain as much insight as possible. As my initial step into real estate investing I'm looking at two possible deal situations. The first is to owner occupy with my wife and kids, or "house hack", using an FHA loan for a duplex, or maybe a quadraplex if I can work the right deal. I was thinking of having this in our name at first since we would live in it for a year or so. Then when we move put it into an LLC.

The other opportunity, which I would love input for as well, is a lower income duplex that is currently bank owned and listed at 43K.  Here are the numbers I've been running and would love input that may help me be more accurate:

Listed at - 43K

Gross Rent - $550/mo - $1100 Annual

Property Taxes - $50/mo - $600 annual (2014 was 522)

Insurance - $100/mo - $1200

Maintenance/Repair (15%) $165/mo - $1980

Property Management - $110/mo - $1320

Vacancy (10%) - $110 - $1320

Until I can walk through with a contractor and inspector I believe the unit could be livable with minor cosmetic repair, Flooring & Paint, etc.  However my estimate for right now is that it would take about 15K to fix it up nice.  My goal would be to force the appreciation and be able to rent units out at $650.  Nicely fixed up duplexes in the same area that sold were around 65K.

I have some experience in renovations.  I actually pastor a church plant.  We were able to lease a 4500 sqft building for a low rate because we had a GC in our congregation and renovated the building which was in serious disarray.  We worked a 24 month time frame into the contract and had the whole building beautifully renovated in less than 18 months.  

Right now with this duplex I've been considering using Hard Money.  The only thing is that from most of what I've seen the minimum is 50K.  The other option I was thinking was to put 20% down and finance it through a bank.  I also have friends that are interested in partnering as private lenders, though it would more likely be an amount to help with the down payment or renovation costs. 

Lastly, I haven't set up an LLC yet. I'm in Florida so I was looking at going with a multi-member LLC. I've been reading on the forums and see different view points. I'm also wondering if I should make an offer or anything else before setting the LLC up.

Well, appreciate anyone's input.  I'm definitely still learning and have a ways to go so any advise will be appreciated.