All Forum Posts by: Frank Maratta

@Adriana Diaz

Try listing on Zillow. Zillow will put it thru to two or three other sites hotpads and I forget the other ones. Zillow helps to weed out better tenants also because they require prospective tenants to answer a few simple questions like income before you decide if you want to even contact them. I believe you can even collect the application/screening fee thru Zillow and use them for the screening process.

@Jimmy Jean-Louis

My personal advice would be to start local for your first property. I can't tell you the amount of times that I need to be on site for something. Although I do manage my own properties and cannot find a good property manager in my area. I also believe that managing yourself will enable you to learn a lot more on your first property. If you can't find deals off the MLS, try to think creatively ! Driving for dollars ect

@Brad Willman

Keep in mind that while some people may advocate against LLCs and advise you to simply carry an umbrella, what happens if you are sued for something that your primary insurance doesn’t cover (which, in turn, your umbrella would not pick up)? For instance I was just threatened to be sued for lead paint poisoning, but was lucky enough to write them a check for $5k and have them sign a release form in return for the tenants not pursing litigation. Lead paint is not covered under my insurance policy.

@Stephanie Choi i would definitely set up an LLC. You can still get a residential loan with an LLC, you just need to close on the property in your personal name (as someone else stated residential loans are hard to obtain in an LLC) and then quit-claim the property to the LLC. While this technically may violate the due on sale clause of your loan, I've never heard of a bank enforcing it.

One thing to keep in mind is If you plan on acquiring more properties in the future and place them all in that same LLC, all of those assets in that same LLC are exposed if you were to ever get sued. So, something worth looking into is a "series LLC". This type of LLC compartamentalizes every asset held under the same (parent) LLC, so each asset is not exposed in case of litigation. From what I've heard, you can create one bank account for this LLC and multiple properties and it won't be considered co-mingling funds. I wish I had more info on this type of series LLC and if someone reading this does, feel free to chime in, because it's something I myself am looking into setting up. I believe you can even take it a step further and set it up as an Anonymous trust, which would allow others to have to dig a bit deeper in case of a lawsuit (if they don't know you own an asset or other assets then the less likely they may be to move forward with litigation).

@James Purvis always use the leverage. But as other are saying make sure that you have enough cash flow to at least cover your mortgage and expenses on your single families. I did a cash out refi two years ago on a two fam I rehabbed myself, I questioned whether or not to just let the property cash flow with no mortgage attached to it, or cash flow much less while pulling $175k out to invest in other properties. I did some quick math and realized I the opportunity cost of capital would cost me 2.5x the money I could make if I didn’t take the cash out refi. I took the cash out refi. Two years down the road I acquired 3 more properties, and am about to repeat the cash out refi on a huge two family rennovation I am just finishing up. And the kicker is that now I have even more cash in the bank then before that two family Reno from two years ago.

The idea of not having a mortgage is appealing but leverage is always how you grow. And do 15 year mortgages if possible.