All Forum Posts by: Adrie Moses-bailey

Thats good to know and I should definitely look at a better insurance policy for it then and calc that in

 Paul,

This is exactly the information I was looking for, thanks so much to you and everyone else chipping in. Is it still ok to make monthly distributions through the LLC or would everyone recommend an annual distribution?.

Thats a fantastic point. I have not locked down the lender bit and don't really understand the specifics of how getting a loan for an LLC work. Was figuring I could borrow in my name then transfer into the LLC. Let me know if thats too optimistic. Regarding the interest rate piece I am basing it on my excellent credit score and the unit would be in charlotte NC. Let me knoe if that number still seems far too low

 Wayne, 

I budgeted 20 a month based on the fact that this is a condo and things like the plumbing are usually covered by the condo board and the HOA fee but to be honest what I had not considered was damage to the interior of my unit not being covered in the event of such happenings

Hey guys, looking to do my first deal and may need to partner with some friends (4 of us) to do it. I was thinking putting the property in an LLC would be the best bet to protect everyone's assets. One thing puzzles me though, I realize I usually don't consider the mortgage interest deduction and Depreciation expense when evaluating properties but these are huge aids in wealth building. What happens to these when you invest through an LLC.

For context I am looking at a $99K condo right now that would cashflow about $244 after expenses of 275 including HOA fees and mortgage of 401 a month for 30 years after a 20% down payment. I can provide more details if that would help you guys answering my question and feel free to weigh in on whether an LLC is an appropriate structuring for such a small partnership.

Pro forma below, column 2 is 12 month while column 1 is one month. The formula for Mortgage payment just copies last years monthly payment unless I put in a new purchase price (signifying a refinance) at the top of the column so the $401 a month payment in column 2 is accurate.

From a personal perspective as someone looking to get out of renting into a home of his own its tough to even find a fixer upper in the city when flipping is so profitable here and guys can come in with all cash offers and sellers know this. That said I don't hat flippers, wish I was them.

Alina I’m here at the hotel where exactly is the meeting?

Ask I would guess. Once you get one property and the income starts rolling in I imagine it would have positive impact on your DTI by raising your income more than the new debt.

 NP leverage is a tough thing to wrap ones mind around but its how most businesses function. Just be careful as it amplifies your gains AND your losses

You already did the math on return on investment. For a 100,000 property paying 1000 in profit a year paying cash gets you a 1% return while paying 20% down and financing 80,000 gets you a 5% return with the same profit . With the cash You have tied up paying all cash for a property you earn only whatever appreciation the  property gets while with a mortgage you earn more on less cash. Thats the whole point of leverage. Certainly you could go all cash and certainly some investors recommend this but you will not grow your wealth nearly as fast as if you used leverage though it will be much safer. Basically you could buy one deal all cash or 5 with the same amount of cash using financing and the tenant will pay the mortgages down for you (hopefully). Its all about your appetite for risk and your goals.