All Forum Posts by: Account Closed

@Leonidas Cicio Congrats on joining the BP community. You'll be able to find a lot of good info & connect with a lot of people! Like how you are getting started and would be something to keep working on.

I think the LLC is a good idea as long as you have set it up properly and are now managing & running everything through the business. This is good because it gives you some asset & liability protection, then also being able to take business expenses & deductions.

I would highly recommend connecting with qualified professionals like CPA & attorney's, etc. within your area that may be investors themselves. I think that will be a big move for you is to connect with other investors on here & also within your area that way you have more people to work with. I would also recommend going to free meetups where other investors go to learn and build relationships with others as well as key people that may support y'alls business. 

Definitely keep up with your personal finances that way you can be solid to future lenders. Overall just keep making consistent progress! 

@Danny Vu You definitely have a lot to consider! I like @Doug Spence's post and agree. You should think of the different strategies you can use if you were to keep the home, what you'd have to do or on the flip side the selling considerations. You can possibly refi & then use the money for another. I'd really consider a lot of people's and your professional's opinions, go over your goals and try and make a decision together for what y'all believe is the best option moving forward.

@Rebekah Martin You put together a great summary of the book. I like all the key points you found, yet I haven't read the book. I agree that our time is our most important asset and definitely think we all need to take this into consideration. Yes, money can provide future freedom and I think we can all look at our own personal habits to see how we are spending time and resources. Great Post!

@Harrison Payne I would highly recommend talking with some attorney's & CPA's to go over tax & asset protection that both own property & have done work within investment/rental real estate. You'll most likely find quite a few here, & in your local area that are doing business. 

You do not necessarily need an LLC before your first deal, but the downside of that is that you are liable if something happens since you are going into business with rental property. By not having it set up properly you are increasing your risk as you may own the property in your own personal name which can be found in public records. Even though everything may go/run well, it's not "if" something will happen, but "when" something will happen. By having a business & investment property you are potentially bringing in a lot of inside liability (from the property, if something were to happen, tenants, contractors, etc. & outside liability (if you were to get in a car accident or something & it's your fault). Overall not trying to deter or scare you, but to help you before you get started with considering these very important things to protect you, your fam, & your $/assets.

Adding multiple properties to the same LLC is also another important thing to consider based on a lot of factors. Like how long are you holding the properties, how much equity do you have in those properties, do you want all of those in the same entity subject to the risk of the other properties, what your overall goals are, how much knowledge/experience you have, how the entity is structured, etc. Which would be another great conversation with a legal professional, other professionals & other sophisticated investors that consider tax and asset protection a big priority.

With the FHA loan you will not be able to close the home in the entities name, because it is a loan product specifically for first time homebuyers sponsored by the government. There are still ways you can protect yourself like trusts that may help if you are house hacking to decrease liability until you can change legal structures in future. Typically with FHA they want you to live in the property as a primary residence. With the FHA loan too, you have to consider their rules/regulations & what they will approve for a home (depending on how many repairs/shape of the property). FHA is a good option for living in, possibly house hacking depending on the home/situation & eventually converting the financing & legals structure over in future to better serve you.

Hard money loans is another option, but brings up a lot of other things to consider with your bottom line, how fast you would be able to refinance, if it's just for acquiring a place that's turn key or if you're about to do a rehab, etc.

Real estate is a viable option compared to bonds. Overall There are a lot of pros, cons & benefits within real estate & almost every potential investing option we ultimately consider. There are also a lot of other factors to consider like your age, how much $ you make, are comfortable with putting aside to invest, your knowledge/experience of what you are wanting to invest in, etc.

Some people like the security with which bonds do provide, as usually you are locked into a rate for x amount of time. You are definitely not going to lose too much sleep, as it is a more conservative/stable, less risky investment as long as you have a general idea of how it works, what type of bond it is, & your overall knowledge of investing, bonds & that process. 

It is the same for real estate, where a lot of it comes down to your skills, education, experience, mentors/community, how well you're systems are, how well you can analyze/find/buy a deal, how well you run your business, etc. Normally you have a lot more benefits with real estate, which comes with more work here and there, more control, more risk, physical tangibility, leverage, potential cash flow, etc.

There is always a lot to consider when making your decisions, so learning from a lot of different resources as much beforehand is always a plus.

@Julian Pulido Congrats on your marriage and engagement! Such an exciting time for you and everyone's families! You are definitely in an in between spot for deciding which would be best for y'all. You have to take a lot into consideration whether buying a place just for yourselves to live in vs buying to rent a place out. 

Mortgage rates most likely will slowly continue to rise as time moves on. The California market for investors is best for appreciation, usually because of more and more people are wanting & are moving there. When considering starting investing it is best to educate ourselves as much as possible beforehand because there is a lot that goes into finding a good deal, what your specific goals are, what type of property you are looking for, the location, etc. These are just a few important considerations on top of buying a place for yourselves too now that you are married. Ultimately as you gain more & more info about each you will eventually make the right decision.

I would highly recommend to keep learning & checking back up on here, get in contact with other local real estate investors within your area, attend meetup groups/investor associations, consider talking to real estate agents in your are that are investors themselves & ultimately talking and considering everything with your wife throughout the entire process to stay on the same page. 

A lot of great info on here from a wide range of people in different backgrounds. Kinda see where the potential idea of it being good is coming from and the standpoint behind it, but yeah it definitely seems counterproductive in some cases too where you could get cheaper financing in your name, not creating taxable income for your business, etc.

@Anna PhillipsI agree with everyone else. Typical long term rental property managers will normally collect that amount of 8-12% but for short term rentals it is a lottttt higher because they are actively managing it on a more daily basis, dealing with turnover, cleaners, etc. and can be anywhere from 20-30% or more. 

So that is a lot off of your profits compared to a long term rental. So it makes more sense to self manage or maybe find someone in house like family or friend that may want some work. 

Woop woop! How did the rehab project go?

 @Jodi Coats Awesome!!! Such a huge success it seems like for your investment! I'm assuming you also learned a ton and is interesting what you still plan on doing in future while considering things like family, school's and finding off market deals!