All Forum Posts by: Timothy Murphy III

@Sawyer Dina

Welcome to BP. Congrats on the acquisition. "House hacking" can be a great way to get started and get your feet wet as a landlord.

@Andrew Victory

Welcome to BP.

@Kenneth Croisetiere

You'll either need to register an Ohio LLC or register your out of state LLC with Ohio to do business within the state. I've had clients who faced housing court charges for buying or selling real property within City of Cleveland without properly registering their out of state LLC with Ohio. Failing to register your company with Ohio may also prevent you from getting access to the courts for evictions, etc. down the line. I don't believe failure to register would negatively impact the liability protections afforded to you by your LLC, but it also can't help. Regardless, there's enough reasons to properly register the company in Ohio OR open an Ohio company.

Registration of a new Ohio company or registering an out of state company with Ohio is a fairly trivial process. Filing fees are typically ~$99 and the forms are simple enough that most non-attorneys can handle their preparation. When clients have asked me to prepare and file it for them, I've done so for a nominal fee.

@Hamid Taba

That area is at least a solid B caliber area, IMO. Tom's rental figures sound accurate to me. The hardest part of a Lyndhurst investment would be finding a property that you can acquire at a low enough price. You might need to settle for more modest returns in order to operate in such a stable area. Alternatively, you could look into South Euclid. It neighbors on Lyndhurst in shares a common school district, but you'll be able to get the properties a little bit cheaper.

@Ryan Budil

If you're doing buy and hold investment remotely, you need a competent local management team. That could mean investing through a turnkey provider (which you've thoroughly vetted) or by putting the pieces together yourself and hiring a property management company to handle the day to day for you. Either way, your local team can make or break your investment so choose carefully.

@Jason Weible Thank you for the mention.

@Justin Frye

You want to be sure that something happens that signifies the transfer of possession from the tenant back to the landlord / PM. That could be a writing signed by the tenant indicating she's transferred possession back, it could be the act of the keys being returned to the landlord / PM (which is often viewed by Cleveland area courts as the transfer of possession), or it could be a completed set out after judgment for the landlord in an eviction case.

The reason you want something signifying the transfer of possession is to cut off allegations of a self help eviction from this tenant somewhere down the line. Should the tenant claim the landlord changed the locks and removed her property, the landlord could be responsible for all sorts of damages such as lodging fees, replacement of lost / destroyed property, punitive damages, and attorney fees. Even if the claims are false, it can be a major headache to defend. Being able to prove that the tenant transferred possession back to the landlord voluntarily (or through a completed eviction set out) will go a long way in convincing the court that such claims are without merit.

@James Warren

Welcome to BP.

@Yoav Lavee

Your goals sound very realistic for the Cleveland area market. Feel free to PM me with any questions you might have.

@Doris Logan

I'd echo the advice to keep separate partnership groups segregated into separate LLCs. If your have a GA partner has nothing to do with the OH properties, then you don't want OH properties in the LLC that you own jointly with said GA partner.

I've seen out of state investors use out of state LLCs for Ohio properties or use Ohio LLCs for Ohio properties. Usually there's not too much of a difference in practice. It will depend on if your home state has more or less favorable incorporation laws than Ohio, and if your home state assesses annual taxes (if any) differently between in state and out of state LLCs. I usually just recommend using the Ohio LLC because Ohio treats corporate entities very favorably and I'm very familiar with the process and controlling law.

Either way, you'll need a statutory agent within Ohio. Either to register your Ohio LLC, or to register your Georgia LLC with the state of Ohio as a foreign entity doing business within Ohio.