All Forum Posts by: Oren H.

Got a call from my property manager for a SFH I own in Dallas area saying there's a foundation issue. Here's the email he sent me:

"I received the report back today and the vendor has reported that there are signs of foundation movement which will need correction in order to ensure that the property does not receive further damage from the movement. The vendor informs me that the property will need 30 total pilings installed, 17 on the exterior and 13 on the interior meaning that not only will there be foundation work, but a build back after the work is completed, with a full cost of $9400."

The property manager suggested we get a second opinion. We called another vendor and here's the update I got:

"I received the evaluation back from the vendor I assigned to look at your foundation and, unfortunately, there is work needed, but it can be addressed without installing or adjusting the interior piers. I have attached the estimates and drawings for you, they are suggesting adjusting seven piers on the exterior of the home for $4325."

This is the first time I have to deal  with foundation issues, so any advice on what I need to pay attention to / know / ask will be appreciated.

Thanks!

Brian, my understanding is that CA will require you to register an out-of-state llc in CA if it is owner managed and holds real estate. Here's what my attorney says:

"As to the LLC issue, the CA FTB does take the position that an out of state LLC that owns no property in CA, with a CA resident who is a person that has "authority" to make decisions for the LLC (as a member or manager), is subject to the $800 annual minimum tax. This has yet to be tested in the CA courts as it is a very aggressive position. "

Thanks everybody for the quick replies.

Hi BP members, 

I understand that as a California resident, if I open up an LLC to hold my out-of-state real estate, I still have to register the LLC in CA and pay the $800 CA fee.

I want to set up multiple LLCs in different states to hold my real estate portfolio. Each LLC will hold one or more properties. However, I'd like to avoid registering multiple LLCs in CA and paying the $800 fee for each.

Is there a way to set up the LLCs in a way so I will only have to pay the $800 fee once? For example, if I set up one LLC as a holding company to manage all the others? Any other options that can help me lower my fees?

Thanks!

Oren

Hi BP members,

I have recently started looking seriously at asset protection and setting up entity/ies to hold my investments. I have spoken with a few attorneys and CPAs but am looking for investors who had actually done it so I can learn from their experience. Specifically looking for investors who share the same "investing profile" as myself - long term, buy and hold, SFHs, done on the side (parallel to holding a full time job). I mainly invest in Texas.

Look forward to connect and chat.

Oren

When I bought my first property a few years back I went through the following thought-process that might help you:

1. Understand the worst case scenario - I asked myself how much money I'll lose if it goes bad - I can't rent it, the market goes down 40%, etc. I came up with $20,000 loss for the type of SFH I intended to buy. Putting this "worst case" scenario on paper made it look less scary. It helped to quantify the opportunity vs. the risk - I am going to invest in RE so I can achieve financial freedom and I will risk $20,000 to do this.

2. Mitigate the risk - as a newbie I decided to put a larger down payment and keep reserves in my savings account to carry mortgage and expenses for around a year if the property is not rented. That helped me get to the comfort level I needed to get started and "just do it".

3. Have a strategy - for me, buying a single buy-and-hold or doing a one-time flip is very risky. But if you plan on buying 20 buy-and-holds over a 20 year period (which was my goal) than the risk is averaged even in extreme situations. You buy your first property now when the market is high but if the market crashes you will also buy a property 10 years from now when the market is low. Overall, some properties will perform better than others and your portfolio will do fine.

After I purchased my first property I realized it wasn't as scary as it seemed and that my worst-case scenario will probably never happen. I felt more confident, refinanced the property, took money out, and accelerated my plans.

Good luck!

A few months back I have received a letter from the city of Austin that they suspect I use a property for short term lease. Apparently the tenant posted the property on Craigslist and somehow the city found out about it. the tenant has not actually sub-leased (just posted the ad) and she apologized so we allowed let her stay. But overall, I wouldn't recommend allowing this behavior as the city fines (and any liabilities) will be on you.

I am looking to get a commercial loan on a small 6-10 unit residential property in San Jose CA. Loan will be <$2m. Is paying 1% of loan as a commission to the mortgage broker reasonable? 

Thanks!

Over six months have passed since the last post on this thread and I was wondering if folks still think Austin and Round Rock are good market for investment. Mainly looking to know if the local economy is strong, if there's still a shortage in supply, etc. and if you believe it's a stable market.

Thanks