All Forum Posts by: Harshdeep Gupta

@Dave Vona That is extremely helpful. I also decided to interview a property managers in the area, and found one who would charge $75 per month, and that will include a monthly walkthrough of the property to ensure the contractor is doing the right work. 

Not gonna lie, a few days were extremely stressful, but now that I have been able to identify key players and processes, things are coming together.

@Johnny Lynum I plan to go in person if nothing else works out, but then I have seen other people figure it out without stepping foot in the market, so it seems like this it should be doable a 100% virtually.

@Drew Sygit You are right, I should have interviewed enough property managers, but oh well, I guess I don't know what I don't know. I did read a lot of books and listened to a lot of podcasts before starting, but there are always nuances. I have a few PMs in pipeline, and will interview a few more. Will go through the articles that you shared. 

Hey all,

I am a new investor, looking to close on my first out of state deal in Philadelphia, Pennsylvania. The property has a value add component to it, so I am trying to tour it virtually with contractors.

My question is regarding closing/purchase of the property! I bought this deal from a wholesaler, and the closing is in a few weeks. At this point, I am wondering who will get the keys of the property on closing. Since this is my first deal, I don't have an extensive network of folks in the city.

Will my contractor get the key? What if I am unable to find a contractor by then? Or what if contractor changes mid way during the rehab? 

Should I try to find a property management company? But I feel it's too early in the process and how do I know if they are a good property management company? Will they help me with the key situation?

Will my wholesaler agent have the keys in case something happens?

In any case, I would like to get the house rekeyed on closing, so how do other investors coordinate all of this, especially out of state.

Looking for any and all advice on this!

-HD

P.S. Looking for recommendations on Property Managers and Contractors. The property is in West Philly area. If you know someone who could help me out, it would of great, great help. Thank you!!!

That's a very similar situation to mine. I live in WA, and looking to invest in Midwest. Inc File itself doesn't charge fees, but you can take their paid packages to outsource some work. I used my home address LLC address, as it didn't bother me and is a pretty normal practise. No one comes knocking at your door, but you might get a few extra mails and phone calls.

You are looking at the California fees, plus the fees to register the LLC in the state you will be buying properties. Budget around $1000 for that. You can pay incfile too, I paid them some money for being a registered agent in the state I want to buy properties in.

An LLC will give you liability protection and access to commercial financing.

The latter is really important as you decide to scale in the future. Or you will run into high DTI scenarios and it will be harder to scale.

It is more work up front, but setting up the right systems from the get go is important. I recently opened my LLC for investing in midwest, and I live in WA. Use an online service such as incfile ( I have no affiliation with them) or get an attorney.

Then get the EIN number by going to the IRS website, and then open a business bank account. Keep your funds separate, and take owner withdrawls.

Again, I am not a certified CPA or lawyer, but this is what I have learnt over my research.

I am a house hacker myself, started earlier this year. Feel free to reach out.

I can't comment on good or bad, there are definitely a lot of them out there. And there are pros and cons with investing with that approach.

Aj has already mentioned the pros.

It is not a good way if you want to scale, and that too fast.

If you read the BRRRR book by David Greene, he says when you are buying turnkey, you are building wealth for someone else.

Let's say you buy something for 200k. The company from which you bought it, essentially got the property for free, because they used the BRRRR method, and now you get that cash flowing property, but you are also out 200k.

If you take the time and effort to teach yourself the BRRRR method, that 200k can easily buy you two properties (like very easily). Maybe even three, four..... you get the point.

So yeah, choose your poison. Either buy turnkey but be out of money, or do BRRRR but put in the hardwork. I lean towards BRRRR because it is a skill, once you learn it, it stays with you for lifetime.

I see, thanks for the input. @Eric Yu and @Sergey A. Petrov

I want to go the LLC way because of legal protection and the ability to scale. An insurance policy has too many gotchas and carve outs, and I am not interested in one currently. So I must create an LLC, just looking for some direction and information in that regard.

First post here! I am a new out of state investor. 

I currently live in Seattle, WA and looking to buy rental properties in PA and IN.

My question is regarding as to what state should I setup my LLC? (I need LLC to get Hard money loans, plus legal protection)
I have been researching online, and was getting confused between double taxation, registering to do business in foreign state fees etc.

Do I need to make an LLC in IN to buy property there? What about PA?

What will a safe and cost-effective way to operate my business?

Should I open an LLC in WA (my home state)

Should I open an LLC in PA?

Should I open LLC in both states, make the WA one owner of PA one? Any other gotchas to look out for?

I will be taking the BP rookie bootcamp too! 

Right now reading the BRRRR book by David Greene, researching markets, so that I can hit the ground running. I am looking to do an out of state BRRRR on a small multifamily.

House Hacking is definitely a great way to start. See you in the bootcamp.

@Bruce Woodruff Everyone starts somewhere, so she has that going on for her. Not everyone jumps in this game with enough education, or some just hope to make quick money. Both get burnt from what my research indicates.

I am a new LL too in a blue state, but I did a ton of research before renting out, did thorough screening, and manage my rental myself in a class A neighborhood. My tenant had a higher credit score than myself.

In this situation, @Angela, you got a few things right, namely you got started. A lot of great advice here already, I would say put your REI boots on, start being a professional, and hire help, namely the attorney and the PM. At one point decide enough is enough, and you don't deserve this much stress over a single property in your life.

This person stopped being your friend a long time ago, I would say do the same. I had a similar situation with a roommate of mine before, and I use to stress too much. Since I moved out into a separate apartment, I have experienced so much peace.

Just my 2 cents. I might be projecting, but this is what I would have done if I was in your situation. And before your next investment, educate yourself thoroughly. Or decide if REI is really the right thing for you. We are rooting for you!