All Forum Posts by: Andrea F.

My husband and I are aspiring to break into real estate investing, have studied BP for over a year, but have been around and around, back and forth about the best strategy for our first deal. We are trying to overcome analysis paralysis and finally take action. While we do have cash saved up, we'd prefer to work on our credit for another year before looking at getting a mortgage or commercial loan to possibly do a fix and flip.

If you were us, would you a) use our cash to purchase, fix and flip something older and cheaper outright which seems like a huge undertaking for our first deal, b) use our cash as the downpayment/skin-in for a hard money loan (balloon) while we work on conventional qualifications to refi at a lower rate in 12 months, c) My in-laws are in the process of purchasing a seller-financed home and are interested in "renting-to-own" their place to us. I know there is equity in the place, I would just need exact numbers from them before we would even consider it. Even so, my husband is most interested because my in-laws only want to get what is owed on it, and it appears that using our cash for some minor improvements on it (or she has offered to get a HELOC for improvements) could add value. My husband likes the idea that we could move from our current apartment into a possible live-in flip to get our feet wet with little to no use of our cash. Again, I would run exact numbers before committing.

Or d) would you utilize some other strategy that you're willing to elaborate on. A house hack or living together here isn't an option because the current house is relatively small and my mother-in-law is basically at the point of closing with the new house she's found and fallen in love with. Thanks for any advice!

Michael Lantrip Amazing! Thank you for the information. Perhaps we will shift our strategy, mindset and learning toward owning it as individuals for now and selling it to the LLC 2-5 years down he road.

@Justin Koopmans thanks for the input, I'm also thinking along the lines of a low down payment financing option such as FHA. Appreciate the reply!

Michael Lantrip the purpose of purchasing it will be for it to be a rental property after a year or two which is the reason we wish to purchase under the LLC--is your suggestion that we purchase it conventionally as individuals in our own name and later transfer it to the LLC, which is part of my question and purpose for this post? Based on various BP articles (such as Chad Carsons "Forget the Dream House: These 3 Alternatives Will Buy You a Dream Life Instead"--I'm on my mobile device so I can't insert the link) and other research we've done, the "live-in-then-rent" is the strategy we've chosen to get started. And it is an "ugly" but safe fixer upper that we can get for a great price and have positive cash flow after we rehab, live in, move out, then rent. And since we as individuals don't own it, the LLC that we own will, we're wanting to live-in-then-rent which is why we're wanting to live in a property we don't own as you ask. We're not seeking protection against ourselves, just protection once the property is being rented to someone else thus trying to set it up in the best possible position from the beginning. We don't want to sell after 2 years but rather buy and hold which is, I'm guessing, why the benefits of Section 121 wouldn't be available to us, am I right? So to answer your question directly, live-in-then-rent, live-in-then-rent, live-in-then-rent :-) I'm trying to figure out the most beneficial way to purchase a live-in-then-rent to later have the protection of the LLC once we get to the point of renting it, without compromising the protection of the LLC at that point. Maybe I'm just over analyzing all of it...

Thank you @Nicole A. and every one else who provided input. I think we have our strategy nailed down at this point. I will update here soon.

Clarification on the thread title which I mistakenly didn't edit before posting: LLC line of credit will be used for any repairs necessary to rehab.

Any advice, suggestions, or strategies on this scenario would be greatly appreciated: My husband and I are purchasing a single family home at auction (we have done our due diligence) as a first investment property. Of course cash is required before bidding. We will use, say, the $40k in our LLC bank account to make the purchase (we want the purchase to be made by the LLC to avoid any issues with piercing the veil, etc) to buy and hold, rehab, and eventually rent out--plot twist: We want to live in the home for the first year or so then move and rent it out. I've seen some say "just live in it" indicating that there is nothing that needs to be done legally for us to be occupying the property owned by the LLC so question 1) is whether this is the case or not. It seems that this would be tampering with the "corporate veil" or borderline intermingling personal with business or appear that we used business capital for our own primary residence... 2) There will be close to $60k equity in the property therefore if we were to ever wish/need to tap into the equity, would a quit claim of deed to ourselves for a personal mortgage until we move, then back to the LLC to rent it out (it will be owned outright so no due-on-sale worries etc), or a commercial refinance in the LLC name be the best course of action to pull out equity for investing in additional property?

@Thomas S. thank you for the reality check, I suppose kids don't really care and the rewards later in their lives are worth more than some immediate sacrifices of wants.

@Jon Crosby FHA/VA is the level our credit and cash reserves are at. I have read so much about the benefits of FHA/VA etc. due to the low down payment, great terms, however, would you recommend getting in the position to qualify for conventional or perhaps even a commercial loan instead?

@John Underwood thank you for the suggestion, I would love to learn more about "converting" a home with a basement for future projects. I do know I will have to look at zoning, etc for such an endeavor.

@Stephanie P. would you quit claim the deed to yourself then transfer it back to the LLC later after it has been refinanced?

Newbie here, hope you all are well!

The husband and I have been reading, studying and listening on the BP community for around a year and are beyond grateful for this community and the wealth of knowledge.

Due to credit and income issues, we have lived in a 2BR apartment for years with our two daughters. I also have 2 precious stepchildren from hubby's previous relationship that don't live with us but stay over often. We have now gotten our finances, credit, and cash to the point of acquiring our first property in the next couple of months. We feel we are also to the point that the kids need a yard, and freedom to move about without disturbing neighbors under us, a pet (0 tolerance for pets here), more room for our other two staying over...we want our first investment property to be a single family home valued at $70-80K that we rehab, live in for at least a year and flip later. We have our eye on a few in our area.

With all the buzz (and obvious financial benefits) about the house hacking strategy, I WISH we could house hack our way into real estate investing. However, given our kids and situation, a single family home appears to be the most logical option. Are there any sort of "hybrid" house hack/live in flip options available if we purchase a SFH with FHA/VA etc.? For example I know there cannot be a "lease" on either of the rooms with these types of financing, but can we AirBNB them for longer terms with friends or family...LOL, I am trying to get creative!