All Forum Posts by: Adam Bontrager

I think @Ben Leybovichhit the nail on the head.  

In order for an LLC to be useful for liability protection, you have to have something to lose, otherwise the benefit is only marginal. If this is your first property, you probably don't have a whole lot to lose and it's likely going to be more beneficial for you to take advantage of home buying incentives than to set everything up in an LLC. Down the road once you've purchased additional properties, you'll probably want to use multiple LLCs to mitigate your liability.

There is definitely a trade off, you just have to decide what's more important to you at this point.

@Shone Freeman,

As many of the members have already mentioned, the Midwest is a great place to invest in.  Cost of  the homes is reasonable and the rents are good.

It sounds like turnkey might be a good option for you since your local market is priced so high. There are great returns available from turnkey properties and the greatest benefit is that you get instant access to a local team that you can work with. The Cleveland, OH market where I personally have experience is really taking off and turnkey investments generally yield returns of 15% to 20% COC. Definitely do your research before moving forward with a turnkey provider though. Having a good team is essential to your success when investing out of state.

Feel free to contact me if I can be of any assistance.  I would be happy to discuss some of the opportunities available in my market.

@Wennie Monroe,

First of all, welcome to BP.  It's a great resource for investors with lots of experience as well as those just starting out.

Many of the Midwest US cities provide good cash flowing investment opportunities.  My personal experience is in the Cleveland market.  Properties are relatively inexpensive (80-90k) and if you finance the property you can generally get 15-20% cash on cash return ($200-$300 monthly cash flow after all expenses).  

Feel free to contact me with any questions.  I'd be more than happy to help you if I can.

@Christopher Griffin one of the keys to a successful turnkey investment is making sure your property manager has a solid reputation and is really going to take care of your property and your tenants.  

I work with turnkey properties in Cleveland. We have quite a few investors from California who love the Cleveland market simply because of the lower buy in. And the returns are quite good as well (15%-25% COC). Investing out of state can be a great idea but you do need to be vigilant. Do your research and find a good property management company. They will take so much of the stress and headache out of it for you.

Hello @Ramek Llah,

We do not currently rent to Section 8 tenants.  We have in the past but decided against that for one main reason - these tenants tend to trash your houses and it's very difficult to get any kind of reimbursement for damages.  These tenants often don't have good jobs or much in the way of assets so you're going to be stuck once they've trashed the house and decided they want another.

We've instead focused on marketing a higher quality rental that attracts an equally higher quality tenant.  Thus far, this strategy has worked out much better for us. 

Feel free to reach out to me if I can be of any more assistance.

I'm with @Simon Shih. It sounds like your goals are more in line with the buy and hold model. Go with the BRRRR method. You'll reap the benefits of the long term buy and hold, but you can also pull cash out through a refinance.

While it's possible to invest in real estate with little to no money (see @Brandon Turner's book on Investing with No and Low Money Down :P) it's not easy and you have to bring something of value to the table.  If you're not going to put up the capital, you're going to have to hustle to find someone else who will.  

That being said, there are plenty of investors out there with deep pockets but little time who are eager to partner on deals.  You just have to get out there and find them.  

First of all, BiggerPockets is a great resource for finding money partners. Get out in the forums and start networking with people on BiggerPockets. I would also highly recommend joining your local REI group; there is one in almost every major city. This is one of the surest ways to make connections with other investors that will be able to help you in your investing career. Also, try just posting a Craigslist ad. I know most investors browse Craigslist quite frequently. You just might be able to connect with someone who can help you out.

Best of luck to you!  Let me know if I can be of any further assistance.

Congrats @Kris Haskins!  On to another challenge!

While I typically try to live as debt free as possible, when it comes to real estate, debt is an incredibly useful tool.  Run the numbers for both using and not using debt and you'll quickly see that using debt as a lever can greatly increase your profitability.  With interest rates as low as they are right now, it's a great time to lock in a loan for your real estate property.  

With that being said, I caution anyone about over leveraging.  Back in 2008 when the real estate bubble burst, far too many people had loans for 90+% of their property's pre-burst market value.  When their property's values plummeted, these owners were underwater and owed far more than their property's were now worth.  

Don't go too crazy but using a reasonable amount of debt can be a great boost to your growth.

While this property might be a "pig", it's hard to beat $1,100 monthly cash flow on that small an investment.  As Jason pointed out, there are legitimate reasons why many investors choose to stay away from properties like this one.  That being said, it all depends on your strategy.

If you think the property fits with your strategy, definitely contact the "seller" and get all the details.  Find the address and research the neighborhood.  You'll be able to make a much more informed decision at that point about whether you're interested in the property.