All Forum Posts by: Benjamin Aaker

House hack a 4 plex. Do you have family who could cosign a loan? That would get you started right away. 

I recommend setting up the LLC now and using that to purchase your properties. You'll still need good liability coverage with umbrella. It will cost more to borrow for the LLC. Why do it? Scaling. You'll want to have the systems set up to grow and it's a lot easier. Also, I like the liability protections and don't want my personal wealth to be tied up in the property. True, it's not ironclad protection, but for high net worth individuals, the risk is higher.

Hello and welcome to the forums!

That's going to take some time to raise, unless you already have a network, which you don't. Networking is going to be the best way to do it. It takes time, so get started now. 

Hi Sridhar and welcome to BP!

It's really a win-win to get the line of credit set up. There's an appraisal and annual maintenance fee, but then the money is ready to go when you need it. Way faster than a mortgage. It's a small cost for ready access to money. 

Agree with @Paul De Luca. Depends on your carrier. Ask your insurance agent. Get it wrong and you risk not having coverage when a loss happens. 

I'm on the other side. I prefer having the long-term lease. Here's why:

1. Why aren't you just starting with a MTM lease? If you are worried about the bank, then you would want to continue leasing up annually. I've never had my bank inspect my leases. Maybe it's different for others.

2. MTM tenants are always one month away from leaving. Then, you have 2-4 weeks of down-time when you are surprised that they left you. They were so happy there!

3. It's hard to raise the rent on MTM. You always worry they will leave.

4. The end of the yearly lease is a great time to raise the rent, sensibly, and following the market. I put on a premium for MTM. Tenants that are willing to pay this are the ones I know will be leaving within 12 months. Now, I'm prepared.

5. To the tenants will leave when they want to argument: They certainly will with MTM, with a contract, there is at least a thought about staying. You can sue them for breaching your agreement.

6. Tenants under longer term contract in my experience take better care of the place. Your mileage may vary.

You are in the landlording business and you've got to run it that way. Keep reupping the contracts and know when they will leave.

Have a conversation with each of them. The rent is increasing to market rent and you'll keep the first one who signs the new contract, after credit/background check. The other one will get a 30-day notice. Beware that this might be taken negatively and you may have to do an eviction.

Talk to the commercial banker at your favorite bank. You'll need a commercial loan. You'll have to get it appraised and hope it comes in at 215k. Then have an attorney draw up the sale contract.