All Forum Posts by: Michael L.

Great Afternonn BP Fam! I've heard many approaches and I presume there is no right or wrong but I'd like some more feedback if yall don't mind chiming in;

1, Do you give your contractor a % to start the work, and if so, what % is appropriate?

2, Do you purchase supplies or leave it up to the contractor?

and if you having any contractor references around the D.M.V feel free to drop them in my dm. Thanks in advance.

Quote from @Sharon R.:

Quote from @Bjorn Ahlblad:

@Michael L. We manage our own properties and have not formed a PM company. Generally to form a PM company and manage properties for others you need to be a licensed realtor. All the best! 

yes, IMO, you should set a company to manage it not because of RE license since you don't need one being the owner BUT you should get one for liability protection reasons and I recommend an having an umbrella insurance as well.  

@Sharon R., are you referring to starting a management company for liability protection reasons and if so, how will having a company offer me liability protection? An also, thank you for your input🤜🏻🤛🏽.

Quote from @Russell Brazil:

Quote from @Michael L.:

Quote from @Russell Brazil:

When you update your insurance to reflect the new owner of the property, that's when the lender is notified and calls the note due.

If you don't update the insurance, they typically will not know. However then you have an uninsured property and an easily piercable LLC since the property is owned by the LLC and mortgage is in your name.

 @Russell Brazil, thanks for the insight. Is there a way to avoid this problem?

Yes. You refinance the property to a commercial loan. You get a new commercial insurance policy with the new owner reflected. And you properly maintain seperate bank accounts of the new LLC.

 @Russell Brazil, so instead of doing a quit claim deed, just wait and when I refi switch everything over to the entity. Am I following your advice correctly?

Quote from @Randy Rodenhouse:

Any mortgage that is paying and current is no likely to get called due.  Like Russell said it is changing insurance incorrectly that will get the lenders attention.  By the way -I would not buy a house with a Quit Claim deed since many issues later on with getting insurable title if you want to sell it later.  

@Randy Rodenhouse, I wasn't referring to buying a property with a quit claim deed, it was a scenario of buying in my name then quit claiming it into an LLC. But I still appreciate the feed back. How do I get around the changing insurance issue as not having that iwould be a huge liability?

Quote from @Russell Brazil:

When you update your insurance to reflect the new owner of the property, that's when the lender is notified and calls the note due.

If you don't update the insurance, they typically will not know. However then you have an uninsured property and an easily piercable LLC since the property is owned by the LLC and mortgage is in your name.

 @Russell Brazil, thanks for the insight. Is there a way to avoid this problem?

Grand rising BP fam🤜🏻🤛🏽! How likely is a bank to call your loan due on a quit claim deed if your payments are current? Has anyone experienced this, and if so, I'd like you to pm me to break it down for me please. Salute🫡

Quote from @J Scott:

As long as you're managing properties that you own personally, you don't need to be a licensed PM company or real estate agent.

If you want to manage other people's properties, then your state rules will apply.

 @J Scott, thanks champ👍🏻.

Quote from @Drew Sygit:

@Michael L. you should account for property management fees when you project numbers for a purchase.

Really doesn't make sense to literally pay yourself for PMC work, as it will all flow back to you anyways.

If you have partners, then yes, you should be compensated for your PM duties.

 @Drew Sygit, thanks for the guidance. I like learning how different strategies work and fail, for future reference if necessary.

@Cory j Thornton, thanks for all the insight. Believe it or not, everything you said gave me a better overstanding on how to approach my goals. As you stated, I'm goin keep digging in and expanding, even when I get to where I think I want to be! I appreciate you bossman🤜🏻🤛🏽!

Great afternoon BP fam🫡.1, When self managing, do you pay yourself a fee? 2, if you do pay yourself a fee, is it considered an expense (tax purposes)? 3, if you do pay yourself, do you have to set up an entity to legitimately receive that payment? I appreciate all feedback!