All Forum Posts by: David Johansen

I have been reading through the forum posts on LLCs and I am still unclear on a few points.

1- Should I use an LLC for my first property or wait untill I have a few and enough equity/cash flo to worry about? (That said I would start off with a landlord insurance policy and a PM will be doing the day to day management)

2- I have read several posts stating that banks will not lend to an LLC that is just starting out anyway which leads me to think waiting may be my best option...?

Thank you in advance for any clarity you can provide!

My biggest fear is that all of the well intentioned who are telling me every RE horror story they know to convince me that I do not want to be a real estate investor are right. This community has helped me minimize this fear to a manageable level and I am moving forward. Every so often though it rears it's head and I re-examine all of my reasons for doing this as well as all of the advice and calculations I am following to minimize my risk and I breath easier:)

I am thankful for BP because:

Rubbing shoulders with the many of you already doing what I want to do is giving me the courage to get started. I have already made contacts who have helped me overcome some of the hurdles to getting my RE investing career started. I wanted to thank everyone who has been kind enough to share their stories, experiences, and some wonderfule contacts!

@Jon Holdman  and @Bill Gulley 

Thank you both for your replies!! I would never have even considered that the appliances in a furnished unit could change the taxes! Thank you both for helping me see the full picture and what could affect the tax rates. I am feeling a whole lot better about making the jump to being a landlord with the information on this site and with a community of successful real estate investors willing to help share your knowledge!!!

@Chris K., @Wayne Brooks, @Jay Hinrichs , @Bryan L. 

  Thank you all for your help!! That makes more sense now and I will definitely be reaching out to my tax authority to see how much I will be affected when I switch to a rental in the next few months.

A friend of mine who is not a real estate investor said they knew of someone whose property taxes doubled when they switched the property to a rental. This seems crazy to me but I wanted to run it by you before I discounted it. Is this something any of you have run into? Thank you.

Ali, you asked if the property was in KY. It is in Kernersville NC. Thanks again!

@Ali Boone I was so excited to see that you replied to my question here!! I am definitely a fan and have learned a lot from the BP articles and blog posts you have written!! As I mentioned in my post to Michael, I apologize as I should have included that this was not a hypothetical purchase but the home I purchased and have lived in for almost 2 years. I am getting all of my ducks in a row to get this property rented and buy my next investment property in the next 6 months. My plan is to then live in that one for a year and repeat the process. I know that for that purchase I will not be able to use FHA financing and I am ready (thanks to a 401K loan) for a larger down-payment. Thank you again for taking your time to reply here and for all of the information you so readily share here on the forums and in your blog!! I will continue to read and learn all I can!!

@Michael Seeker Thank you so much for taking the time to double-check my calculations!! So much is riding on my getting this right for future deals that I was really hoping to have some of you professionals look over my shoulder so to speak. When I was starting this thread with all of the calculations it was feeling very long and I didn't want to add too much detail. I see now though that I should have included the fact that this is a property that I bought almost 2 years ago. I was going back using what I have gleaned here and on Ali's blog to see how I did and to make sure I can confidently analyze my next purchase which I am planning on doing in the next 6 months. So you are exactly right I did use an FHA loan and I have lived in the property now for almost 2 years and am working towards renting it soon. Thank you again for your help!!

@Gerald Harris  Thank you so much!! That is great advise that I will definitely be following!

@Jason Bott  I was very relieved to read this!! That was very cool of you to check that out for me and that really means a lot to me!!!