All Forum Posts by: Dallin Watson

I had my tax guy open an LLC for me this spring, but don't know much about maintaining it. I currently own a duplex and I'm working on getting it out of my name and into the LLC's name. I am also in the middle of renovating one of the units. Between renovations and major property maintenance (removed 4 trees that were too close to the property) I am at the end of my savings. I have just enough to complete everything, but don't want to strapped for cash in case something unexpected happens until I can finish renovating and get the property cash flowing again.

I have been thinking about getting a personal loan to have as money on hand in case something unexpected does happen. Where the property does not currently cash flow, would getting and paying for a personal loan in my name, lead to potential cause to pierce the vail in a potential legal dispute if all the expenses associated with the loan is ran through the LLC? Could this potentially make my personal finances and the LLC finances be seen as one in the same at a legal standpoint? I know there are things you need to do to keep the LLC in good standing, but not sure what they are. Would this be something that could hurt the legal protection between personal and business?

Would there be tax implications with this? If the loan is in my name, can I still write off the expenses with the LLC? If I could do a loan with the LLC would I be able to write of any part of the monthly payments? Would I be able to write the expenses off if the loan and the expenses were in my name since the property is still in my name?

I have also thought about seeing if I could get a loan with the LLC, but I know that usually takes a bit longer to get approved than personal loans do. I am hopefully not going to need the loan for more than a few months. Only until I can get the property restabilized. Could a short-term private loan with the LLC be a better route to look? I can't imagine the short-term private rates, and the personal loan rates are much different right now.

Any guidance would be greatly appreciated. 

Hey Ethan love specific criteria you have set for youself. I did something very similar in Pocatello. Bought a duplex with an FHA in 2021 and been slowing remodeling the whole thing.

Getting a job is probably the first step when you get back. Finding the highest pay job and living below your means so you can start saving money to get the 15k more that you want. I personally live on 50% of what I make so I can save part of that and use the rest to fund the rehab of my duplex. 

Cost of living is usually the biggest expense each month so if you have family you can live with when you get back that would be a great route to go. Paying little or no rent to family is a huge money saver than the rent you would pay in the IF or Rexburg area.

While working and saving you can study your market inside and out so when you are ready to buy you know what a deal looks like.

You can also start building relationships with other local real estate investors. On here is a great way to find local people. I see @Don Spafford on the Idaho forums all the time and where he is also in the IF area he would be a great person to link up with. There is also a real estate group in IF as well that does monthly meetups. I've been to it and it's full of great people and information.

Building relationships with people may also help with getting into a deal sooner. Rather than saving up all the money yourself you could find someone to partner with who has money and from all your learning of the market you can be the brains of the deal.

I love to see that there is more people wanting to get into real estate in the south east Idaho. This area is amazing! Just don't tell everyone that haha.

I have yet to invest out of the market I live in, but I have thought about climate change and the natural disasters when I finally make the jump. I have looked up natural disaster maps to see where they are most common, and where they are headed in the future. Lots of people are moving to where natural disasters are becoming more common and could cause big problems down the road. Something I think that should be worked into your analysis. Here soon we may have to have a bigger budget or emergency fund for properties in the higher natural disaster areas. Insurance companies might catch on too and raise their rates as well. I also look to benefit the area I'm in by trying to be eco-friendly. Plant a local indigenous tree, if the area has a recycling program, make sure that the property has those bins, have a sheet for tenets of ways to save power, water, etc. Doesn't add much to the overall maintenance of the property and mother nature will be grateful as well. To better the place we all live, has to start somewhere, and right now the way we're headed, it's going to get worse

If all the numbers work out, you shouldn't have a problem with investing in townhouses. I would contact the HOA before purchasing though and let them know what yours plans are for the property. Sometime being upfront with the HOA can save you many headaches down the road, or sometimes they don't want anything to do with rentals in their townhouses and run you out. There are starting to be more HOAs that are being setup for STRs and LTRs. If possible I would look for one of these because the people in the HOA are investors too and they want to keep their rentals as well

I Self manage a duplex that I bought last year and use RentRedi for managing the property. It has the ability for the tenants to set up automatic rent payments so the first of every month rent is pulled from their account and deposited into your account. Very easy and haven't had a problem that customer support couldn't easily walk me through to figure it out. 

When should you start thinking about cutting back your W2 hours, so you can do something more productive with those hours? I closed on a duplex a month and a half ago now, and just resigned the tenant that I inherited to a new year lease. I have to live in the other side for the first year, so the property doesn’t cash flow right now, but with some remodeling I should be able to raise rents enough to get $100 from each unit in cash flow. I forced myself to be cut back the lifestyle when I decided to get into real estate and I cut my lifestyle to be 25-30% of my monthly income. I was able to save up for a 3.5% down payments in a matter of months. I did find that this harsh lifestyle cut back was very hard and ended being unsustainable, so I now am living on 50% of my monthly income and saving the rest. Because of these lifestyle cut backs, it will not take very many properties to be financially independent. Because of my lifestyle cutbacks, and now that I have some phantom cash flow coming in to pay part of the mortgage, should I cutback from 40 hours a week, to work on more productive things like the real estate investing, or should I keep working the 40 hours and keep putting the extra income away for a while longer? The 50% that was saving each month for the down payment, now covers the Morgage and utilities, and with the phantom cash flow coming in now, it can now cover part of the mortgage as well. I don’t have anything going toward cap x or anything like that right now, but all the major things have been done within the last 10 years, with the furnace, water heater, and roof done within the last 3 years. I have worked cap x into the final numbers of when both units are remodeled and rented out. With the phantom cash flow coming in and covering part of the mortgage now, should I cut back part or all the hours that equals the phantom cash flow, and spend that time working on the real estate business or keep saving all that I can for the next property and work on the real estate business when I can? I am lucky to get 5 hours a week to work on the business part right now. I get a yearly raise, and if I keep lifestyle creep at bay I could save even more to be able to buy more properties, but I don’t think the bank will let me have more than one because of my income level from the W2. I absolutely hate my job and it is pretty much a dead end job as well. I’ve got big ideas for what I want to do and accomplish, and I can’t do them working a W2, and I can’t do it without having money as well. When did you decide to make the jump and out of the W2 world and truly into real estate investing world? 

Selling with a squatter is totally possible, but the price might be steep for you as the seller. Most buyers don't want to deal with this unless there's a big discount it the purchase price usually. Making an attempt to kick the tenant out without having to evict is what I would try. Talk to them first and see if they will leave nice and easy, and if not you can try cash for keys, or sadly have to threaten to evict. Either you or the new buyer of the house will have to get the squatter out so all depends if you want to do that or not

I would ask the loan provider of why specifically they would require the investor on the loan. Shop around to a few other banks and see if they also require this as well. If you find one that doesn't then that might be the way to go for this 

Hello 

I am looking for a Property Manager that knows about student housing in Pocatello. Looking for recommendations on one that someone has had good experiences with. Potentially managing a bigger student housing property.

Getting it inspected should be done just to know what is exactly going on. Structural engineer or foundation contractors should be able to check it out and tell you if it is good or not for free. They could even bid it out for you as well so you know the cost and what it is going to take to fix it, then go to the seller of the property and say "I want this fixed or the price dropped this much."

If the bid comes back and no one wants to pay for it move on. Not worth continuing that lead.