All Forum Posts by: Dominick Johnson

True. 

The work around is to quit claim deed the title back to your personal name, refinance, then quit claim to the LLC. I'm not suggesting you do that, I'm not an attorney or CPA, use your own risk tolerance.

Short answer: No. You don't purchase car insurance before you buy a car. You don't need asset protection before you have an asset. A tenant isn't going to sue you if you don't have a tenant. Get the property first, then worry about an LLC.

A lot of people suggest not forming an entity and just getting an umbrella policy. The majority of those same people have entities themselves... If you intend to run your real estate investing like a business, why not do it from the start? Forming an LLC will force you to have a separate business checking account, track your expenses/income, talk to a CPA about tax strategies. If you don't do these things, the LLC is just a piece of paper with no legal merit. An umbrella policy isn't going to encourage you to do those things, because the policy will still be in effect whether you run it like a business or not.

Quote from @Gabriel L.:

Quote from @Dominick Johnson:

You get a check for the difference at closing.

 That's what I was hoping for but apparently that's not the case. The difference is just lost, is what my lender tells me.

The money is definitely not lost, it’s going somewhere. Ask your lender to explain. Maybe you elected for it to go towards the purchase, and your loan is $1k less.

You get a check for the difference at closing.

I use real staging through rent to own furniture stores. It’s super cheap, only needed for one month at most, and they deliver and pick up. 

Quote from @James Cress:

@Dominick Johnson thank you i will have to look into it.

 Actually it takes a couple days for the transfer to complete. My tenants always pay their rent early so I thought it was instant.

Commenting so I can find this again later!

I don’t know your market, but in general the housing market is slow from November-January. I think your difficulty selling has a lot to do with timing, not just a market shift. 

I use Apartments.com. It has ACH payments that deposit instantly to your bank account with no fees for the tenant or the landlord. I also use it for prospective tenants to submit their applications through the website. They do the background and credit checks for a small fee to the applicant.

Quote from @Nicholas Aramouni:

Quote from @Dominick Johnson:

Is your capital all cash or does it include other assets? What is your primary residence situation? Could you house hack and potentially only need to put down 3% on the first property? Or do you have enough equity in your primary residence to get a HELOC and use towards the 20% on both properties?

 Hello. It is all cash and house hacking is not a possibility since I’m investing outside my home town! Any perspectives here on the original question?

I would avoid the mortgage insurance costs and only purchase the first property for now. Sounds like you’re close to having enough capital for the second property shortly after, so why rush it and pay unnecessary costs.