All Forum Posts by: Charles Carillo

@Derek Bleam

Just a couple of thoughts on LLCs. 

I am not an attorney. Speak to an attorney before making any decision.

Setting up an LLC in a state with LLC anonymity is great for protecting your privacy; however, privacy is really the only additional thing you are achieving. It will not protect you or deter your property from getting sued. If your LLC is sued, you will be required to defend the LLC, your name will then become known, and the plaintiff's attorneys will amend the complaint to include you. Suppose you are personally sued; during the discovery process, you must provide information on all of your income and assets (including your LLCs in any state (with or without anonymity). Anonymity is great, but it only does so much.

@Ivar Kulla

First, you must decide whether any of the partners/investors will be passive. You must speak to an SEC attorney to set up a syndication if there are passive investors. You can set up a joint venture partnership if everyone is truly active.

Are they going to be buying, improving, and flipping land? If so, it will be nice and clean since you will be their agent. If you will be investing alongside them, you need to vet your partners before setting up a partnership. I personally would be their agent, but I am very hesitant to partner with people unless I have fully vetted them.

I would be their agent on a few deals, and then you would decide if you want to partner with them. In most cases, it probably won't go that far (most people talk), but if it does, at least you know they are serious and you understand how they operate, which will help you decide whether to partner with them in the future.

@Ugo O.

We have partners who are foreign investors. DM me and I will send you contacts for; attorneys, lenders, and accountants they have previously used. It is important that you hire professionals who have experience working with foreign investors.

@Simone Montague-Jackson

I always suggest that investors and homeowners avoid home warranties.

"the typical home warranty costs $450 annually, and only 25% of premiums are paid to homeowners. The company providing the warranty keeps most premiums as revenue and profit."

https://www.ramseysolutions.co...

https://www.zanderins.com/dave...

Every time I hear about property warranties, it is when something major goes wrong, and the tenants are complaining (rightfully so). The warranty company takes its time accessing the situation, and then they tell you there is a deductible; they only cover so much that you need to use their preferred company, which will take three weeks. All the while, the AC is out, and it is July.

It is much better to add a reserve fund to it monthly. If you know that something major will need replacement in the future, increase the monthly amount you deposit into your reserve fund. When something goes wrong, you can find the best contractor for the job who can make the repairs right away. Now your tenants are happy, and you have minimized the time you would have spent speaking to your tenants about the delay or fighting a warranty company.

@Mark Walker

Cap rates vary by asset class (A, B, C, D), condition, and vintage of the asset and the market, to name a few things. Local brokers in your market will know the current cap rates for the property class, mainly based on recent comparable sales. You could also ask them for some of their recently sold listings, and you can compare the properties and the cap rate they traded at with the subject property you are looking at.

@Felix Piper

If everyone is truly active, it can be a simple joint venture. If there are passive investors, it is now a security, and you need to speak with an SEC attorney.

@Kiley Harris

I would get a separate bank account right away. This will help you separate your property's funds from personal funds. Start depositing all of the rent into that account while paying expenses for that property out of that account. That will solve a lot of the confusion. Next, you could use rental tracking software, but really, 3 people are paying you monthly (plus what you pay every month); software might not be required at this point.

@Dominic Richardson

Private money lenders typically want a property with great potential and an LTV that secures their principal.

@Korey Greene

We have partners who are foreign investors. DM me and I will send you contacts for; attorneys, lenders, and accountants they have previously used. It is important that you hire professionals who have experience working with foreign investors.

@John O'Brien

I would search for some independent insurance agents in your area. I have had my best luck working with agents who work with many insurance companies.