All Forum Posts by: Dennis C.

Will do @O'brian R.  Thanks for the recommendation.

That would be great @Jeb Brilliant.  I sent you an email as well.  Thanks.

I struggled with which forum to post this topic, but decided ultimately on this one.

I'm ready to begin looking for my 2nd (and possibly 3rd) buy and hold REI. Based upon many of the forum discussions here on BP, I'm going to initially concentrate my search in the area of Kansas City, MO and/or Indianapolis, IN.

Since I live in AZ and am not familiar with either of these areas, I think it would be in my best interest to visit them and get a better visual understanding of these markets. I'd like to come out to each city for a day and meet with established PM's and RE Agents to help me identify which areas of these cities are best for out of state investors, etc.. Preferably, these PM's and Agents would also hold REI in these markets so that they have the investor mindset as well.

Likewise, if you're a buy and hold REI in either of these markets and are open to sharing your knowledge with a newbie in exchange for lunch/dinner and good conversation, or even if you have a PM or Agent that you would want me to know about; please contact me so we can discuss more specifics.

Ideally I'd like to visit these locations in the next month or so before it gets too cold for this AZ native. LOL

Thanks for taking the time to read my post.

@Brandon Hall Thanks for the heads-up...yes, they do the full spectrum; tax prep, planning, financial services, etc..

I definitely like the idea of having a separate book for the rental units, and from my discussion with an attorney specializing in asset protection, having a separate banking account is a must in order to show the courts (should it come to that) that the LLC is a true separate entity.

Thanks again for the advice.

@Brandon Hall He also told me that there was no tax benefit to moving my current rental property into an LLC (he agreed that there may be a benefit from an asset protection standpoint). His recommendation on that idea was not to waste the $$ setting up the LLC, transferring the property, etc., but instead to sell the property and invest in the market with him. :-/

Thanks @Mike Dmuchoski.  I'll give Tim a call.

@Brandon Hall he basically said it was a really bad idea; specifically that it was not worth the risks (e.g. tenant issues, repairs, etc.) and that none of his higher net worth clients got there by investing in buy-and-hold RE.  He believes that the market is the only viable option to create passive income.

Does anyone have any recommendations for a CPA that is versed in rental properties in the Phoenix area?  I met with a wealth planning CPA here yesterday and he basically freaked when I told him of my plan to invest in rental properties.  

Thank you for the great recommendations @Paul Timmins and @Marco Santarelli.  I'll be sure to check all of those out.

Hello. My name is Dennis and live in Phoenix, AZ and am interested in learning more about RE investing to create passive income. More by accident, I've had a single rental property since 2009 as a result of purchasing a foreclosure home for my primary residence and not wanting to take a complete bath on the sale of the townhouse I was previously living in.  I've been lucky over the past 6 years and have only had to have 2 tenants, both were great and took good care of my property during their stay and the unit has only been vacant for ~5 weeks in 6+ years.

I always intended to sell that townhouse once the market came back, but now I find myself rethinking the idea, and actually want to add more properties. I've been reading books, watching YouTube videos, and visiting forums like BP to create a plan on how I should go about this.  I've been introduced to so many great ideas and concepts I never thought of before, but I have to admit, my head is spinning a bit. :$

Thanks and I'm looking forward to learning from any of you that are willing to teach me the best practices of RE investment that work for you.

I live in Phoenix, AZ and was able to score a great deal on a foreclosure home for my primary residence back in 2009 as a result of the housing market bubble burst a few years earlier.  What the market bust also meant is the 2 bedroom + 1 bath townhouse that I purchased in 1998 and was living in at the time was majorly underwater on its value.  Not wanting to take a complete bath on the sale of the townhouse, I decided to hold onto this property and make it a rental unit and hold it until the market values rebounded.  I've been lucky over the past 6 years and have only had to have 2 tenants, both were great and took good care of my property during their stay and the unit has only been vacant for ~5 weeks in 6+ years.

Now I find myself rethinking the idea of selling this unit and am actually entertaining the idea of purchasing another rental property to create passive income for myself in the coming years.  I've been reading books, watching YouTube videos, and visiting forums like BP to create a plan on how I should go about this.

I've been introduced to so many great ideas and concepts I never thought of before, but I have to admit, my head is spinning a bit.  Here's what I am initially thinking to do:

1. Create an LLC for asset protection and tax reduction. Right now I am leaning towards the default tax status for this, but wondering if I should I consider setting up the tax status as S-Corp instead. The whole paying yourself a "reasonable salary" aspect of the S-Corp seems to go against my goal of tax reduction.

2. Take out a HELOAN (not a fan on the HELOC variable rates) on my primary residence and pay off the remaining balance on my rental property mortgage. I should be able to get a lower APR% on the HELOAN than I currently have on the mortgage, which would cut my remaining payment schedule from 6 years, to just under 5 years paying the same $ amount I am now each month.

3. Transfer my now paid-off townhouse to my LLC. Not 100% clear on the process for this, nor the tax implications in doing so (e.g. depreciation recovery, gift tax, etc.).

4. Take out a loan against the townhouse and purchase another small rental property (e.g. condo, townhouse) through auction or similar.

5. In 5 years, once the HELOAN is paid off, take out another loan against my primary residence to purchase a 3rd property.

For those of you with experience in this arena, what are the flaws in my "perfect world" plan?  I'm sure there are several so I welcome any constructive advice.  Even tough I've had this rental property for 6+ years, I'm a total newbie to the concept of real estate investment, so be kind.  Thanks.