All Forum Posts by: David M.

@Todd Robertson

It all really depends on your situation and risk tolerance. The whole purpose of the LLC is for asset protection. Done correctly, if somebody sues you or the LLC, the suitors can't get at both pots.

But, insurance policies can be used in lieu of the LLC protection.

The cons of having the LLC is that pretty much everything is business — insurance, financing, etc. if you are just starting, you won't be able to use your personal fiances to help with securing the loan. Since the LLC will have its own bank account, etc, then you have to have enough funds to operate. You can't co-mingle your business and personal funds

That’s the basics in a nutshell..

@Caleb Fledderjohann

Don’t have experience with that, but just to drop my two cents: Of course the rent will be what the market can bear so research will be needed. Depending on how your utility companies bill, I’d probably include the utilities in the rent. With itinerant people, why have the hassle of constantly changing the utilities in and out of your name, not to mention they’d have to do the same. I see you basically competing with some sort of extended stay hotel.

Hope this helps

That's interesting about Capital One...  My Chase ink Business cards don't show up on my personal credit report nor count towards the 5/24 rule..

@Jason Avila

I don’t know your financial situation, but for 15k I think you could find a better way to pay that off. Even bouncing around a couple of 0% intro credit cards and couldn’t you have this paid off quickly? Can’t you refi somehow?

I'd like to hear what TSP says. I think it will be a disbursement since you will separate from active duty and be rehired as a civilian so it will trigger. I expect this since even moving from one gs position to another across Services is actually simultaneously separating from service then being rehired. That's why certain leave balances can't be carried over

Good luck, and I hope you find a way through this.

@Denzel Domingo

When it’s time to close the deal, YOU sign. Attorney draft the documents, coordinate, and make sure the legalities are covered (in your favor hopefully) so that you are signing for what you wanted.

@Ric Ernst

Before you do this, do you have a mortgage on this property? Be careful if the note holder finds out they could in the Note by executing the Dur On Sale Clause

@Louis M Cocce Jr

Just to add on... you or multiple people can gift but the best is to “season” the funds which is generally 60-90 days (basically enough time to have two bank statements. Confirm with your loan officer and/or get a different lender

Honestly, I think its a matter of your risk tolerance and your available time to manage. I agree that piercing the corporate veil is also a risk, but its yours to make an issue. If you keep your finances clean there won't be a problem. Many people in my area (NJ) make LLC's for each property and to keep them straight they just use the street address for the name of the LLC. At least in NJ its cheap to make a single member LLC, then you need to create a bank account for it, etc.

If you are going for 25 properties, I'd personally wouldn't want that much risk on me personally so I would do them under a LLC, or a bunch of individual LLC's, or a chained/series LLC variety. Yes, the interest rates will be higher all things considered they are very low still, and i have no idea what scale of acquisition you are doing so I can't judge the full impact. But, thats the cost of insulating yourself from the liability which can be huge given how litigous we are in this country.

Oh, I'd like to comment on the insurance company lawyer thing... I'm not sure I entirely get that comment. For example, a LLC is issued Commercial General Liability (basically, any home improvement contractor has to legally have it, at least in the State of New Jersey), why wouldn't the insurance company lawyers represent the LLC? I've had the discussion where the advantage of having your own insurance is they lawyers will represent the policy holder as opposed to maybe a sub added to the policy. But, never had to distinguish between the the LLC entity and the LLC Member... There must be some legal/insurance nuance that must be spooking you since on the surface it doesn't make sense. The insurance company should be covering the policy holder.

@Mitul Patel

Yes, there are many advantages to buying under your own name when you are starting. With only one property your liability is relatively limited (vice having 20 properties) and financing is easier since you can get a regular conventional loan (not necessarily a personal loan). In a nutshell, that would be an "easier" way to start until you learn more about this, then weave in a LLC when you are ready.

(Did you post this twice in different threads?)

Its great you want to jump into this, but depending on what you do, college is only four years -- and not even all year round.  Also, while this is too much to into in a post, in short what is your goal?  Then, think what is your path?  You stated you want to study finance to help you do real estate investing.  You want to be a Realtor --- probably to help your real estate investing...  You are thinking of a job -- I don't know what kinda of job...  But, being a full-time Realtor is a job...  Maybe you should do "all of it" (just not at the same time) to achieve your goal.

Where do you see yourself in say 10 years? I get the feeling its real estate investment. What is that? Is is somebody who is fixing and flipping homes? Or, somebody who is wholesaling? Or, building an income producing rental portfolio? Or, maybe wearing a suit with a corner office on the 100+ floor somewhere managing a REIT?

Just to give you a dose of realism, yes there are role models and examples of people who have made it big with, for lack of a better term, a thin starting resume.  But, those are the "rock stars" and few people can do that.  Many people...  from all types of careers... have had variety of jobs... sometimes in a variety of fields... to get them to their success today.  You may not want to hear this, but gaining these experiences is part of the hard work to get to your end goal.  Many times, there are many paths to reach the same end goal, but not every path let you achieve many goals --- your goals will, and should, change as time goes on.

Best of luck.