All Forum Posts by: Andrew Kazakoff

House hack = You buy and live in the house with roommates who pay rent. You also pay market rent to build equity, get experience...An owner occupied loan will also be more favorable ie less money down.

@Taylor Brugna We want to own in an LLC to prevent personal liability for the owner occupant - We were planning to buy the property in our names and then a few days later Quitclaim into the LLC. Can you list some of those downsides? We are planning to keep most of the money in the LLC in order to use the cashflow to buy more properties, but today I heard that the LLC is going to be taxed even if we don't distribute the money? Then I heard from another person that the LLC, itself, should be buying the property and not me and my partner? Then I heard that I should buy the property with my partner and then quitclaim deed...I am not sure what the most straight forward way of doing this is. Bottomline is that I am trying to buy the property with a partner, and one partner is going to live in the house and pay rent like a tenant (also putting in a down payment and on the mortgage note). What is the most straightforward method? (The loan is a jumbo)

@Taylor Brugna: I am buying a property, with another co-borrower, co-owner and my co-owner will be an owner occupant. We want to put the property into an LLC. Can we BOTH get interest tax deductions?

Does it make sense to have an ARM mortgage when looking to buy and hold for the long term? I am interested in the ARM because it improves cash flow in the short term and then I expect to be able to raise rents, gently, every year or two.

We file property tax abatements.  We charge 50% of the first year's savings, you get 100% of the savings after year one.   

As an investment, you should analyze the property with you paying for your bedroom, effectively you paying rent to the landlord (yourself).  If it doesn't cash flow with you paying, then it's not cash flow positive and very few people recommend that investment. If it does cash flow with you paying, although your cash on cash real return might be negative, the other tenants will help you with the loan pay down and you can always move out, have more equity and then have cash flow.

My recommendation, find a place that you and some friends can improve...redo the bathroom, floors, etc. You can build more value from day one. I'm also from WH, there should be plenty of places that have value add capabilities.

In short, when I lend, my decision making process is around equity and exit strategy.  I don't care what the borrower's credit score is as long as they have an equity and exit strategy. I want to see that the borrower is successful so we can do more business together. I will not lend to them if the numbers don't make sense for the borrower.  I want them putting in at least 20% if not 30%, but it can be private money, and have a strategy for paying back the loan.  I want them to buy at a price that will support, rehab, holding costs, commissions, etc and have a worthwhile profit for the borrower.  This in turn will make it a secure deal as a lender because the property has at least some equity, has some flex room for mistakes and has a plan to payback. Without any equity or an exit strategy, the probability for failure is too high.

I read an article that Donald Trump would have made more money dollar cost averaging in the S&P 500 than building his RE empire. Can anyone attest that building a real estate portfolio outperforms dollar cost averaging the famous indexes over the long term? I plan to invest for the next 40 years therefore, at the end of 40 years, with 20K in principal and 10K invested each year, with a 9% return I would end up with 4.3 Million according to the compound interest calculator that I used, with little headache along the way.  I want to make sure that I will end up with the most money at the end of my working career. Which method will make more money? Successful RE investing OR dollar cost averaging in the S&P 500 or Small Cap Index?

Are you looking for homeowners? If yes, you can buy a subscription to whitepages.com. if you are looking for landlords, you can go to meetings or try to find their business and then cold call your way in...or if they self manage sometimes, I don't know the law in cook county, they need to post their management contact info in the lobby.

I can understand your "panick" and being overwhelmed...but I think that you would really need to screw up badly to not make money on this one OR to not get a rent of at least 1400/Month. Sounds like a good BRRR...I think you found a good one. Very well done pulling the trigger and making it happen. You make money on the buy, this was a good buy from what you are saying. Now just do the work! I am also curious, where is a good order of operations list when rehabbing a home? I just found this on BP, what else? https://www.biggerpockets.com/renewsblog/2015/09/11/step-step-guide-rehabbing-rental/