All Forum Posts by: Daniel Kong

@Michael Plaks I was under the impression that if your LLC owns rental property, and your LLC takes a loss (maintenance, repairs, interest payments, etc), then you can claim that loss against your personal W2. Is that incorrect?

@Jay C. Great point. Just to clarify a little - From my understanding, Margins are more of a short term leverage vs RE. And in RE you could put down 0, 5, 20% down and and get to hold a property worth 100% and reap the benefits (cashflow or appreciation) over a long period of time. 

Another difference is that if you default on the mortgage and are foreclosed on, you are out only the money you put in, because the bank will just take the property and sell it to make their money back. Versus on margin, you could potentially lose more money than you put in, since you are now on the hook for the extra amount. 

Not trying to argue, just a young buck trying to learn and see all the angles. Thanks Jay!

Great find, and creative acquisition! Congrats and good luck!

Its really your decision. For peace of mind, you could do the mortgages, but you also lose that 3-4k for each refi while pulling out only 40-50k, at a time (I think you typically can only pull out 75%, might be less for lower priced properties). So if you factor that into the equation (plus the interest u pay on the mortgage and the hit to your cashflow from monthly payments) and the HELOC jumps to 7-10%, which way do you come out ahead? Just at a glance without running numbers I'd think the extra cashflow, and not losing those points for each refi, the HELOC even at a higher APR would win.

It also might make sense to just refi maybe your top two appraised properties, then aggressively pay that HELOC as fast as possible.

Zillow never lies!!!! =P

Haha nah, best bet is to work with a local Realtor. He/she will give you a much better estimate of what the property will be worth. 

I think one thing you will need is Builder's risk insurance to cover while you are rehabbing. 

I'd say pull as much equity out as you can. That's the beauty of RE over stocks or other investments. Leveraging banks and people loaning you ridiculous amounts of money secured by property. 

A good bet is to visit your local banks and see what types of products they have. Credit unions typically have better deals. I know here in Hawaii we have an unsecured personal line of credit for 4.99%, and HELOCs for 2.5% which is awesome lol.

Go to vegas and bet on black. ;)

I'd say consume as much content as you can. Listen to all the podcasts, and read as many books as you can. There's just so much to learn in this space. My first couple months, I literally read 10 books and listened to hours of video/audio. Also, get hooked up with your local REI meetups to get around other guys doing this.