All Forum Posts by: Dominick Johnson

@Travis Timmons Need to include that one in your book! 

 I realized what you meant after my response and edited it. This is a question I see a lot from early investors, so thanks for the post!

Hi @James Dainard! Your answers could be a bit confusing, as an LLC can not get an FHA or Conventional loan for an investment property. The work around is as you stated, purchasing the property in your name and then doing a quit claim deed to transfer it to the LLC.

The key thing to note is that these answers only apply if you are living in the property. That said, most banks and mortgage lenders won't loan to LLCs with no existing credit score or proof of financial stability.

Bad idea...even if it were possible, the interest on credit cards is around 22%. Even hard money lenders only charge around 12-15% interest.

I'm sure most brokerages have people willing to teach you and free classes to train you. If not, they aren't worth hanging your license at. My wife is a realtor with Keller Williams and they are excellent at this. Interview different brokerages and see which one is the best fit for you. It's pretty nice getting that 2.7% kickback check when we close on an investment property that my wife is the buyers agent for. What better way to learn than on your own deals. You will build confidence for when you represent actual clients.

Also, if you go down this path of investing, there's a good chance you will grow to like that more than whatever W2 job you are pursuing after graduating. My advice is to save yourself the career change in 5 years and pursue being a realtor now. You'll likely make more in one commission than you can in one month making a $100k salary. This will speed up your investing portfolio, and give you the freedom to not sit in an office 40 hours a week.

 *that is $500k PROFIT if married filing jointly, $250k PROFIT if single to avoid paying capital gains tax. You also have to live in the home for 2 years minimum.

Hi @Jose Mora, fix and flips are about as far from passive as it gets in real estate investing. I am telling you this based on experience, it can easily make your life hell for 6+ months. If done right, you can make a "quick" profit, but if passive is your goal than look into rentals or wholesaling.

As far as taxes, anything profit will be taxed regardless of how you spend/save it. The trick is to reinvest it to delay paying the taxes (or live in it for 1 year and avoid paying capital gains tax if it sells under $500k). You should know what your plan is with the money from the sale before you even buy a property, so I would echo what others have stated and recommend you consult a CPA first.

Read books and attend classes on real estate investing to continue growing my education and network. Continue looking to see what is out there and what the market is doing, but focus more time on my family, friends, and my day job.

I am not interested in creative financing right now, so I pay off my HELOC each time before using it as a down payment on the next investment. I can still do a couple more conventional mortgage loans, which is the cheapest financing option that allows you to keep all the equity and cashflow yourself.

If the property is already listed with an agent, no you should not bother the seller. If it is for sale by owner, obviously you have to contact them somehow, so yes you can call them without a real estate agent being involved.

Book recommendation - Investing in real estate with no (and low) money down

Cheap House = Expensive Headaches

Why buy 5 units in what sounds like a D class area when you can make the same cashflow with 1.5 units in a safer area with quality tenants.