All Forum Posts by: Anthony Dooley

What you have realized is that wholesalers are unreliable at best. They can't find a better deal than you can. Drive around and you will see properties in distress. Help that owner get out of their problem and you will get a good deal. I find more properties than I can possibly buy. Don't look at listed properties, they are over priced. Call for rent signs that are in someone's yard. It's obviously vacant and the owner may want to sell. Deals are easy to find if you are willing to do the leg work. If not, you will over pay and waste time with wholesalers.

This is what your question sounds like to me. I want to start playing poker, but I don't have any cash. Should I borrow against my home to play my first game of poker? If I do this, should I bet all of my money on the first hand, or make smaller bets until I learn the game better? 

My advice is to take small risks in the beginning. You have an expensive home, so I assume you have a pretty good income. I suggest that you set aside some cash for the sole purpose of buying a rental property. While you are saving, learn more about your market. The "low income high crime" areas will give you a bigger ROI. The nice suburban areas are lower risk and also lower ROI. You will need to find the area where risk and reward are acceptable for you. Tip: if it's listed with a Realtor, it is over priced as an investment. Find a house in distress where the seller needs to sell. When you buy it at a lower price, they will be thankful that you rescued them. If you are going to make a mistake, and we all do, don't put your home at risk or borrow at 8% for that mistake.

Your question is very confusing and it exposes how inexperienced you are at this business. You are definately over thinking this and making it more complicated than it needs to be. Ask a tax professional if the S corp or LLC is better. The property manager has nothing to do with how the property is held (LLC, S Corp, personal name). This is a tax issue. Your first line of defense for liability is insurance. The second is the LLC, which can be inside of an S Corp, but isn't necessary. The best liability protection is to hold the property in a trust and you can be the trustee for the benefit of the LLC.

Property taxes automatically change based on the purchase price the following year after the purchase. It will not change during the tax year that you purchase the property.

Good luck finding something.

You are doing great! It doesn't really matter how they are held really, but for future investments it's good to form an LLC and open a business checking account. It simplifies things when you put all of your rent into that account and pay all of your business expenses from that account. If you want to get a commercial loan for a multi-family or a portfolio of SFRs, it's good to already have the LLC when you talk to a lender and they will make the loan in the LLC name, which doesn't show up on your individual credit report. The LLC doesn't benefit you on taxes, but it give you a level of anonymity. Talk to any local real estate attorney and they can help set up the LLC and transfer the property into the LLC name.

All agents are investor friendly. The question is are you agent friendly? Agents are friendly if they think you will close, but they are not going to write a bunch of low ball offers that they know will be rejected. They are not going to run comps for you for free. They work on commission and commission is paid at closing. 

Even if you had more to put down, there simply are not many/any multi-family properties for sale. If you find them, they are over priced. Single family however are everywhere and tenants stay longer in a house than they do in apartments.

Hit me up and I would be glad to answer any questions about Columbus and lend you my opinion on prices, rents, neighborhoods, lending, etc.

In order to use the equity in all of your rental property, you need to talk to a lender that does commercial loans. They will appraise your properties and loan you up to 75% of the equity in those properties, which should be used to buy more cash flowing property. They will advise you, but it may be better to have an LLC and make it a business account with the lender. There is no need to involve your personal residence in the process. Interest rates on commercial and investment loans are around 8%, so it needs to be worth buying.