All Forum Posts by: Andrew Cheek

Hello again BP! I completed my first deal last fall and now have a Duplex. I am trying to find out how to be more tax efficient. Long story short, I had an idea and was wondering if this is feasible. Any advice if greatly appreciated!! My idea:

Create an LLC. Have this LLC be the "management" co that my tenant pays in order to live here. Can I funnel the property upkeep expenses through this LLC and shelter the rental income? Even further, could I refi my personal car to the LLC and have it be a Company vehicle?

Would be great to shelter some of the rental income especially as I look into this second property soon. Thanks all!

-Andrew

Good sized deal good luck! I agree with the above post on offer price. Make one backed by numbers and explain what your analysis shows. You can't go wrong with being financially accurate.

@Jerry Jawuan Huggins and @Cara Lonsdale Welcome!

@Cara Lonsdale I just bought a Duplex with a VA loan 2 months ago! I live in one side for now. People try to make this super complicated but I have discovered the follow:

Benefits:

Almost zero money down to get into property. I only paid 650 cash for inspection + appraisal. My earnest money came back to me. 

VA inspections are strict and will make the seller fix anything that needs to be done as long as seller doesn't try to make you do it. Don't let them do that to you.

You can buy a mix use property where the retail space is <= 25% of square footage. 

No PMI reducing CF.

Negatives: 

You cannot purchase "investment" property, you must owner occupy. My loan office told me that even after 12 months, I have to have a "reason" to move. New job, commute struggles, something to justify leaving and buying another home within my entitlement. 

Property must be sound, distressed won't pass a VA/FHA inspection

Funding fee- unless you plan on making a DP

But all in all I had a fantastic experience. I could always recommend my guy if you like. Anytime you owner occupy with a loan it's a bit slower process, but I don't think this reflects directly on a VA loan.

Best of luck! -Andrew

@Nathan Gesner Thanks for the details this is helpful to me as well!

This type of example makes me really want to purse BRRRR. Great job and thank you for sharing your success story!!

@Jon Sidoti Have you looked into Cincinnati OH?

I wouldn't get to lost in the weeds since this is a duplex and not a larger complex. But take it as a learning experience, and make sure to hash out all financials BEFORE signing. That way all funds are legally accounted for before anything is signed. I had a similar experience myself but got through it just fine!

@Joseph Cornwell This is truly inspirational to me thank you for posting! 

For financing, doing a 80%LTV was feasible because it was a commercial loan that anticipated the increased rents and value of the home, is that correct? My other question is how were you able to put in place a traditional 30yr loan if you are not owner occupying?

I just bought my first Duplex owner occupy and am curios how to finance more. Again, congratulations on this deal well done!!

-Andrew

Thank you both I appreciate it. I like the analogy of "speeding on the highway". Looks like I'll sit tight for now and save up capital. Take care!