All Forum Posts by: Aaron Vargas

@Bob Norton that makes sense. A real estate attorney advised us not to quit claim deed the property from individual ownership to LLC. Since interest rates are so low now, there is more incentive for banks to call the loan due down the road should interest rates increase.

Last question for you. Are there any tax advantages to running the books through an LLC vs through a fictitious name or DBA?

I really appreciate your insight!

@Bob Norton thank you! We decided against setting up an LLC since it's tough to get financing with a newly formed LLC. Is a formal partnership agreement required for tax time? Or are we able to allocate profits, interest deductions, depreciation, etc. based on what we agree even without a formal agreement?

I’m looking to acquire a small investment property with a group of three people. We decided we will purchase as individuals to take advantage of more favorable rates. But if we purchase as individuals, how do we keep accounting separate from our personal finances?

I am part of a group of three individuals who are looking to partner to invest in a duplex. We have a newly formed LLC. I spoke with one lender and a mortgage broker that both said acquiring a property with an LLC would require a commercial loan. Interest rates are about 100 bps higher for commercial vs conventional loan, all else equal.

I know that it's possible to acquire the property as an individual then deed the property to an LLC but the lender could call the debt due from an acceleration clause. One lender told me flat out, we would not be able to deed the property to an LLC.

I've reached out to a RE attorney for guidance but I'm hoping to get some insight here. We're trying to get our investment pursuits off the ground but I'm having a hard time piecing everything together. I know it's done frequently, so I'm just looking to understand generally how LLC ownership is done. We will likely be making a cash offer then cash out refi after acquisition.

Thanks for your help!

We are starting a new LLC to be used for RE Investing. Plan is to start with a duplex and scale from there. What is the best banking institution for a new LLC with minimal assets? Local credit union, national bank, no brick and mortar?

Thanks for the insight!

@Stephanie P buy down to 65-70% LTV? Could that get us to 5.0%?

@Stephanie P. Thank you! Right now modeling a 30 year am with 5% rate. All individuals that will make up the LLC have good credit with stable financials.

@Joe Martella thank you! I’ll check it out

Thanks @John Warren! I’ve heard come tax season, having a software came make it easier on accountants (saving me money). Any truth to that? Or still mostly not that big a difference bc it’s one property with 6-10 units?

What suggestions do you have for good accounting software starting out for keeping the books on investment properties? I would only have one small investment property (6-10 units) for now. I love a good spreadsheet and can nerd out on excel but I want something that can streamline the process a bit so I’m not spending all my time setting up the spreadsheet. I like the specs of Buildium, especially since it provides an easy way for tenants to pay rent with minimal fees but that type of software seems like it might be overkill for just one property.

Any advice is much appreciated!