All Forum Posts by: Bryan Beal

@Kyle Neff personally, I have multiple properties under each LLC I have - I think it's overkill to get a new LLC for each home. You can get yourself a business umbrella policy that is 1) easy to manage and 2) cheaper than forming new LLCs. Not to mention the insurance you have on each home will protect you from liability as well. Instead I'd make it a set dollar amount for each LLC - for example you may not want to own more than $1 MM in assets under each entity.

@Jason Ma take a look at the cap rate - typically the best metric for real estate investing. Take the NOI on the property and divide it by the value of the home. There are varying opinions on what a "good" cap rate is but it truly depends on many factors (for example - is it in a high appreciating market or are you only investing in this for cash flow?). I try to always be above 7.5% and with all of the investments I've made to date, they are all strong cash flow positive.

@Katie Souder

3.5%? Must be an ARM because you're not getting that rate on any fixed loan right now. Be careful of those as the balloon payments can be treacherous.

Also, seems like we’ve decided not to invest in this one - by all accounts, that’s probably a good call. Something better will present itself!

@Michael Dengler one piece of advice - if you can live in the property for 2 years as your primary residence, you can sell the home without paying taxes on any capital gains. Just food for thought.

@Chip Cogan I have multiple LLCs with multiple investment partners in each. I have LLCs where I'm the single member and offered investment shares to investment partners and I have LLCs where we split the ownership based on equity invested. Long story short, there are many ways to structure these entities but it really depends on how you want to divvy up ownership. Based on what you're saying it looks like your partner is putting up the majority of the capital. You can split the LLC say, 90/10 or 80/20 depending on the discrepancy of capital investments. But be aware that some lenders will require every member of the LLC go through underwriting if you want to buy kore property through that entity.

@Katie Souder that’s very little cash flow and not a lot of room for error. How much are you putting down? Based on that payment, I assume escrow payments are impounded in the payment - what interest rate are you getting? Might be worth shopping around... In fact, I have access to many lenders that might be able to help get that payment down.

@John Williams I will say this - the safest and best way to protect yourself is through abiding by SEC regulations and guidelines. That said, if it’s friends and family, people that are close to you, you should be OK. If it’s friends of friends or people you don’t know personally, it’s much riskier. Make sure whatever you’re doing is under contract and in writing and that you and your business have the proper insurance. Bottom line, as long you’re going to do exactly what you say you’re going to do, you shouldn’t have to worry.

@Gray Valdez anything that seems too good to be true is usually too good to be true.

@John Williams do you know the person or is it a blind inquiry? Different ballgame depending on the answer to this question.