All Forum Posts by: Brandon Hall

Putting a property into an LLC after closing will trigger the "Due on Sale" clause which means the bank can require that you pay off the outstanding loan balance or they will repossess the property (similar to "subject-to" deals).

That being said, the likelihood of that happening is slim.

Read this article: http://www.biggerpockets.com/renewsblog/2013/08/17/rental-properties-llc/

@Trevor K. My parents buy in NC so it wouldn't be feasible for me to manage their properties. I do however manage their financials and taxes. I am working toward my CPA and figured that would be great experience.

And don't worry about discouraging me. I tend to remain optimistic no matter what the odds!

@Robert Williams @Trevor K. Thanks for the info guys I do appreciate it. I work as a consultant leaving me little time during the week to do much of anything. Do either of you think it would be possible to get picked up by a prop. mgmt. company if I am really only available during the weekends? Even if I worked for free or next to free? I just want to learn the ropes.

Thanks!

@Trevor K. An investor wouldn't hire me because I don't have the necessary experience. Other than my parents owning rentals and knowing what my age group looks for in rentals, I don't have anything else to offer. Except for the fact that I would work on contingency.

I guess in my mind, if someone called me and said "I'll get your property rented and you aren't out of pocket until someone signs a lease" I would be inclined to see what the kid could do. Even if I were still working with another company. There's just no risk for me in that scenario as an investor.

Maybe that's not how the world works though ;)

@Trevor K. working on contingency would mitigate the risk for the investor. The investor would only be out of pocket once the place was officially rented. Why wouldn't an investor agree to that?

@Robert Williams Are there any legal requirements in the D.C. area? Would you mind explaining how you initially started up?

Hello Everyone,

I was doing a bit of reading earlier this morning and read about a particular property rental company in the D.C. area. This company basically contacts landlords and, working on contingency, attempts to find a suitable renter for that home. Should the company find a renter, the landlord will pay the company a fair commission.

Does anyone have experience with these companies? Do you know how profitable they are? I imagine it can be quite lucrative depending on how much time and effort you put into it, especially in a large metropolitan area such as D.C.

Do you know what databases these companies use to find rentals and renters? If you were called up by one of these companies, what would make you want to use their services?

Since I live in the D.C. area, this seems like a decent enough opportunity to get my feet wet with real estate while learning the market at the same time. I am fresh out of college so buying a property in D.C. will take a bit of creativity. I figured I could possibly try this out in the mean time.

Let me know what you guys think! Thanks!

Brandon

Paranormal activity is the direct result of a huge marketing ploy to get people to watch/buy movies and buy Halloween costumes and candy. To a certain degree, people enjoy the thrill of being afraid and thinking about the "unknown."

If the numbers work, buy the house. You are buying a stream of income so it should not matter if the house is "haunted." I would check your state laws to see if they mention selling a haunted house as I think there is one state that requires disclosure.

Best of luck!

@Chad McIver You gains are not "capital gains" rather they will be treated as ordinary income, meaning they will be taxed at your marginal tax rate.

The tax law basically states that if you purchase an investment with the intent to hold either for cash flow or appreciation, then profits on sale will be treated as capital gains and taxed at the capital gains rate.

But since you are flipping a house, you did not intend to hold it, and will therefore be treated as inventory and taxed at your marginal rate.

Also, as far as I know, you cannot roll over your gains on a house you did not intend to hold as an investment (i.e. a house you flipped). If you hold the property (generally for 12 months) you may meet the "intent to hold" and you will be able to roll your gains into another property using a 1031 exchange.

Hope this helped.

@Apollos Hall if you aren't into land lording, and you are bored and need a hobby, I'd say use a fraction of it to flip a house to see if you like flipping houses and invest the other portion in ETFs or mutual funds until you decide if real estate is the way you want to go with it. With no experience, I would be hesitant to invest 100% of that into real estate, especially if I ended up not enjoying it.

Another option, and the one I would opt for, is to become a private lender. You get to sit back an collect monthly paychecks at a rate you demand. Doesn't get much better than that!