All Forum Posts by: Case Stiglbauer

@Tanya F. Thanks so much for your response. The brink next Wednesday sounds great.

Your financial setup sounds very close to our other business. Though we have a single owned LLC that is just a pass through to my taxes.

I think I’ve come full-circle to the point that I just need to get more comfortable with how rental agreements and insurance protect our personal assets. Thank you for your response.

@James Marshall thank you. I have so much to learn. I’ve heard these terms over and over and am realizing only now that:

(A) neither of us have low enough income for Home Possible and

(B) the cash flow margins are tight enough (if possible at all) in Madison. The high FHA mortgage insurance and the fact that we can't cancel it without refinancing means it's probably not for us.

All this said, if we are patient to find the right house, we should be able find 20% for the down payment. I wanted to put less down because I want to build equity through rental payments and I see this truly as a 15/30 year investment (think retirement), but the month-to-month margins are already tight enough.

@Daniel Dietz

Wow this is my first post on the forums and this is unbelievably helpful.

I’m glad to hear you are having success near Baraboo! We have family ties in a few towns to the south (think Stoughton) that would probably be easier to find units in, but we love Madison and want to keep looking for something that will at least come close to positive cash flow (after accounting for expenses through the usual analysis).

In time, we may concede and wish we had listened to you. For now, we want to try to find a place that works for house hacking. I wish I had more ammunition against the argument that we shouldn’t simply “hope” for appreciation, but we also want a place downtown to live and still have income from W2 jobs.

In short, I’m going to give it a little more time to learn for myself and may reach out to you if I find it’s not feasible.

@Basit Siddiqi

Possibly a whole new world opening to me. I didn’t realize that joint-tenant or tenancy-in-common was an acceptable form of ownership when receiving and reporting rental income.

Wow the homework is building up quickly. Thank you for your help.

@Anthony Wick

This seems like a great lead. We’ve only been prequalified for an owner occupied loan together, but I’m confident we would qualify individually.

I understand your will and basic human trust approach with your partner. I am in an equally trusting relationship. However knowing too many family and tax lawyers has tainted us.

So my next three areas of research are:

(1) To what extend does insurance on a rental property protect your personal assets? (2) What type of non-entity legal agreements are available for rental property owners? (3) How do non-married, non-entity co-owners manage their taxes?

Thanks to all for helping me form my thoughts and thanks in advance for future suggestions.

@Steve Roos

Following this, as I am prepping to buy a rental property with my “significant other.” Am curious how to split the income between two people with no “entity” present.

Lol wish I could edit posts. To be clear - Our CoC ROI expectation is from cash flow from the units (and not appreciation). It may be difficult because of high housing prices and relatively low rental rates, but we are trying to find our first property to make that work.

@Anthony Wick

Somehow you read my mind. Living in downtown Madison is expensive relative to rest of area and property should continue to appreciate as university and hiring grow. Because our goal is to achieve close to stock market ROI while building equity thru holding rental properties long term (we shouldn't need to access the equity/down payment soon), I think House Hack via FHA is possible. We also want to continue to live downtown for a while longer so that would be perfect.

One wrinkle is we still need/want to buy a relatively inexpensive house on a family farm in the next couple of years. Not necessary for this post, but we were hoping to use our FHA slot there.

Anyway, are there examples of the necessary legal docs? Would they simply be the docs that strictly business partners would enter into with joint ownership of a rental property?

And no. Apparently I don’t understand the post paragraph spacing in these forums yet.

Thanks for responses. We don’t intend to grow beyond a few properties. This is for sure a longer term buy and hold scenario.

As far as assets to protect, we are mainly concerned about our personal finances. Funny enough, she is an attorney and I am a financial consultant for health insurance co’s. However neither of us have any professional interaction with the real estate world.

The next step seems to be learn more about protections provided by insurance. I’ve already started to fill this gap in my understanding, but any relevant resources are appreciated.