All Forum Posts by: Elizabeth Park

Furnished Finder is a popular site for mid-term renters.  You can see what is available in your area and look at the price and amenities.

Without W-2 income, a DSCR loan might be the right option for you. This type of loan values the property bases on its cash-flow not on your income. There are some great options for lenders in the "Build Your Team" tab.

You have to get out there and find people to partner with. You have to have something to offer. Cash finds yield. Do you offer it? Find a good deal then finding money is easy. There are a ton of options, PMLs, Hard Money and DSCR. Feel free to drop me a line and I'll see if I can tell you more but as I said - Find a good deal first. The rest is easy.

@Elizabeth Park You can use your Wyoming LLC if you want. You also don't have to create an LLC and can just hold it in your personal name. Some will say this is a bad idea, but having an LLC does not make you invulnerable to litigation. I own two properties in an LLC, but thats because I did BRRRR's and refinanced using a DSCR loan, and many lenders require those properties to be held in an LLC.

I also own 5 properties in my personal name, but I have an umbrella policy to give me extra coverage in case the liability coverage on my individual property policies gets exhausted. 

LLC's cost money to set up and maintain, so you just have to weigh the benefits and cost.

@Elizabeth Park

California is generally more cumbersome than other states when it comes to taxes and filings. Even if you create a non-CA LLC, if you are managing the business from California, you will likely be deemed to be "doing business" in California and therefore likely subject to CA taxes. California charges a minimum tax of $800 a year per LLC, and more if you have gross receipts in excess of $250k. So, if you create an LLC in another state, you will likely need to register it as a foreign LLC in California. Though, this process will be the same for the other state (if you created a CA LLC you may need to register it as a foreign LLC in the state in which you are doing business/holding property). This means that you will probably need to pay registration and filing fees in at least 2 states if you don't buy CA property as a CA resident.

Be sure to tell your accountant that you may now need to file non-resident income tax returns in each state where you own property as well. CA taxes residents on worldwide income but may provide a credit for taxes paid to other states.

Most likely the state where the property is located is where lawsuits would be brought if they are something for personal injury like a trip and fall or something of that nature because the “cause of action” arose in that state. So even if you pick a state with stronger protections like WY or NV, the cause of action arose in the state where the tenant fell, so likely that the court where the accident happened would have jurisdiction. Of course, with all things, the answers to all these matters will depend on the circumstances.

California tends to have more laws on the books and requirements and restrictions that it can be a good idea to form a CA LLC for out of state property so that you as a CA resident are covered, and to try to have your contracts fall under the purview of CA courts. It also is helpful to have a California LLC in case you ever sell that property and move into another state so that you do not need to form a new LLC altogether with new operating agreement, just re-register in the new state as a new foreign LLC. Also, the state of formation is likely where internal disputes would be brought among LLC members, so if you and a partner and/or spouse live in CA, you probably want to arbitrate in CA if the two of you had a disagreement. But, that is not always the right answer and you should speak with someone familiar with your personal situation to get advice specific to you.

*This post is informational only and is not to be relied upon. Readers are advised to seek professional advice. This post does not create an attorney-client or CPA-client relationship.

There are many ways to have an LLC hold property. "The best" is a highly subjective term best determined through a conversation between you and your attorney.

There are many ways you could do this. One may be to hold the property in one of your existing entities and register it as a foreign entity in Indiana (also hiring a resident agent). This would reduce filing fees and the amount of effort you need to undertake to maintain corporate formalities to retain any protection from those entities. You might want to create a new Indiana LLC and have that LLC be owned by you or one of your entities. Of course "the best" option may be to not use an LLC at all and instead get great insurance. This would be particularly true if you are not great at maintaining corporate formalities or you want to use a Fannie Mae loan to buy the property instead of a bank loan.

@Elizabeth Park could you hire an employee to do maintenance and manage the landscaping? This would likely push up the cost but lower other cost/ create improvement elsewhere.