All Forum Posts by: Alis B.

As for financing through a new LLC, yes we are being offered ARMs by local banks and I'm not happy about adjustable rates (4.25% for 5 years with half origination is "best" deal so far), so I'm creating my formula for what I can buy so if I stick with that, I should be fine. It will require me not to get trigger happy and buy out of excitement & emotion and rather buy out of panning. We are debt free and didn't get this way by accident.

Thank ya'll! Yes this information is helping.  This is a career change for me so I am glad to have a professional community to help me with basis 101 questions.

The reason for the layered LLCs is for protection. (We are starting out with one but will expand. I am looking for multiple long term SFR holds.) The need for LLC protection comes from my unfortunate personal experience with the legal world and the fact that at one time, I had everything unprotected (cash and an acre of land which was not connected to our home so it was not protected by homestead). Thankfully I came out with both.

If I have placed finances in a holding company, then they are not part of my personal funds. If a tenant gets legal with the rental then they can get legal with the management company. Yes they can add me to the suit, but there is nothing to gain as I'm a measly employee and have little in my personal account.  Another example, if we are in a car accident and damages exceed our insurance, we don't want to have the rental property in our name. 

Because of life events, I am a the-glass-will-break-at-any-time-so-don't-go-around-barefoot-without-a-band-aide kind of person. 

To restate: LLC#1 can own rental property and not need a realtor's / broker's license. Then LLC#2 can be the forward operating company that runs credit checks, screens tenants, and is the landlord and also does not need a realtor's/ broker's license. And finally, me, the member of both LLCs and the front person working with tenants, I do not need a realtor's / brokers license.

Lots of learning upfront but my goal is to have a well oiled machine. Thank you for your time. Keep your experienced advice coming! It's all welcome.

-Alis

Any Texas property managers / rental owners available to help? 

I have not bought a property yet. In doing research I have learned that I may need to add a step to this process. I may need a Realtor license.

My plan is that my holdings LLC (LLC#1) will buy the rental property, then my forward op LLC (LLC #2) will be the managing company. If I am neither the property owner (#1 is) and I am just employee of #2, is a real estate license needed at any level?

Hello neighbor - Being new to real estate rentals as investments, I have found that BP has a wealth of info.  My potential properties will be located east of you in Belton/ Temple areas. 

Because I'm also new to this type of investment, I have minimal advice but in pricing you may consider not pricing rent on the high end as you may not get as many tenants to screen and may be left with a short list of not-so-preferred tenants. The better the rent = more applicants = you can choose from a better pool. 

Are you working with an agent? The listing agent can obtain surrounding rental info - an idea if it's a high rental area, what the rental  rates for that neighborhood are, etc. 

I read in your profile that you are unsure of how to finance - have you since decided to go VA loan? I am not directly military so I am shopping banks for a commercial loan (my LLC will purchase the rentals so I have to go commercial route - ARM or Balloon loan and I'm leaning toward ARM)

I'm heading over to the link Gerald gave as I continue my research. 

Welcome to rentals! Welcome to Ft Hood!

-Alis

Kevin, et al - 

Thank you all kindly for your time, effort and experience in helping me along. It is appreciated more than you know!! You guys are awesome.

To ad a bit of framing around our LLC structure we have a layered corporate structure (S-Corp Taxed LLC's) to protect our personal assets and vice versa.

Currently we have a forward operating management company that handles all of the rental transactions & ops. However, our holdings company actually owns the property. i understand there is a ton of paperwork and tax headaches that come along with this, however, we have been through a federal level legal ordeal in the past and we're not going to allow ourselves to be that exposed ever again.

God forbid, in the case of a random car accident, where the opposing parry wants to sue beyond  our umbrella limit, our property assets would not be judgement proof. This is our attempt to keep them all protected.

Just a little background on the motivation behind the structure and the questions. 

So, while we have suberp credit and personally qualify for a great loan, we are looking to have the LLC obtain the loan.

Thanks again!

I'm waiting to hear from our bank to hear what their offer is. 

Hi Doug - one main reason we are using a LLC is to protect our rental from being unprotected assets in the event of a personal legal claim. We have been in this position before and have been advised by a trusted corporate lawyer to set up this structure as a multi layer protection vehicle.

Beginner's oops! Looking for way to finance my LLC owned rental.

I have a fabulous lender and told him we were looking to purchase a rental property. He sent over prequal pprwork. I didn't think to mention that our LLC was to purchase and own the rental, and not me personally. That tidbit of ownership put a halt to being able to work with him.

Am I looking at going through a community bank? Having an ARM? This is completely new territory as we have stellar (personal) credit and I had not given a thought to not being able to obtain at 30yr fxed 4.5%. Then paying on principal.

This is new territory and I would like advice on how to proceed in finding a lender for my LLC property (we are in TX)

Thank you

-Alis

Quick note - I am reading and listening to every one of you. Because of suggestions, I have  found new sources to help in my property search, I have finished reading the online booklet, procured a realtor, have my ins company on stand by, have my lender on standby. Tomorrow will be to look at the documents section of BP. I'll definitely need my Peet's Italian Roast to keep up the flow of energy! Since posting 2 days ago I have gained tons of knowledge and I really and truly appreciate each of you taking time to drop advice! 

Eric- yes, your information is helpful. Good info to digest. After reading, I believe I am on the right path.  This is a new business venture for me so I'm readjusting my way of thinking so that I am paying attention to the right details and learning the right questions to ask- thank you!

Thank you Brandon - I'm blazing through the Ultimate Beginners Guide. 

Since initially posting, I am choosing to use a realtor for at least this initial first purchase, I have my lender lined up, and have the insurance company alerted. Now on to study up rental contracts, advertising to rental prospects, and how to best screening them.