All Forum Posts by: Clay Manship

HI All-

I am in the midst of closing on my first deal, which will be the first of hopefully many units to be a part of my rental portfolio. However, in the closing of my first unit, I am putting the property under my personal name, which is something that I am somewhat uncomfortable doing, as opposed to seeking limited liability through something like an LLC.

I am seeking to keep myself separate from the business entity, should a deal go sour, such that the bank can not go after me personally, etc etc. Any ideas how to best accomplish this? The LLC is the first thing that comes to mind, but from what I understand they can be pricey to maintain, especially if I am putting each rental unit in its own LLC.

Thanks all!

C

@Brett P. Don't worry so much about going into debt--some debt is good debt. An investment that will eventually lead to cash flow you can use to pay on your existing mortgage is powerful. Just make sure the investment is right.

I am currently taking out my first mortgage to pay for my first property. Although, it's been a pain in the ***. Most investors like us use cash for deals, and private lenders who will front the investment sum for you on a private note.

I will be using cash deals moving forward. Quicker deals, easier negotiating, avoiding more closing costs, etc. I understand the anxiety associated with taking out another mortgage, but view in the standpoint of an investor: investors take risks where they can add value, and have it end up paying off and work for them.

@Brett P.

Welcome brother! I am the same way--23 years old, breaking into real estate investing. I am focused on buy and hold strategies, trying to establish some good and rapidly increasing cash flow from what will eventually work up to 10-20 properties. Reason being, I work in high finance, and am also working 8-5 (on a great day) and can't make the commitment to flipping houses, or constantly being involved in the moving parts of those deals.

Tends to serve me well. As I develop in my real estate career and 8-5 job, I am assuming I will move into a more dedicated role, and hopefully in the next 10-15 years, a full time real estate investor in commercial properties.

@Stephen Underhill @Joel Phillips @Greg McGuire Would love to meet up and get a little networking going. I can tell you all about my deal(s) and what I have planned for the future.

After all, the goal is to meet 4-5 like-minded guys and start an investment group that can eventually turn to commercial properties (I happen to like retail best). In fact, I am getting some drinks with another young real estate guy here in town tomorrow, who just wants to do what I am getting into.

Feel free to e-mail me, [email protected], or message me on here. Hopefully we can set something up whenever you all are ready. Nice to meet you all.

Joel ,Stephen, and Greg-

A fellow Indy guy here too--relatively a rookie. I'm 23, and recently started working on my passion for real estate investing. I just closed on my first rental deal which seems to be killer. Would love to share some wisdom and learn some from you guys too, if you'd be down to grab drinks or something sometime.

Let me know or find me on LinkedIn/Facebook. Can never meet too many RE people.

Hey Jacob-

I am a recent grad too, trying to do the same thing in the greater Indianapolis area. I am closing on my first deal currently and moving ahead with #2 this week.

Form an LLC. Make sure everything is spelled out in writing, and BEFORE there is any exchange of capital/money. Make sure principals get equity share equal to the amount that they put into the LLC--doesn't matter if your buddy wants equal share or not. Make them pay as business partners.

Most importantly, understand your strategy. Are you flipping? Buying and holding (sounds like it)--how many years down the road? Who is paying for maintenance? Is there a shared pool of reserves to dip into? Who is sourcing deals, raising capital, and are they getting a kick-back for their work?

All very important things to consider...but relatively easy to figure out. Write everything down and keep researching. Work hard and everything else will take care of itself.

Hi Ashley-

I like the goals, but personally would like at least one goal to be: "secure one deal, have several leads leading to __________." What is the financial goal? Give yourself an objective goal that you need to reach--it will help you get there faster.

Also, why an S-corp for your rent to own company? Why rent to own contracts in general, and why no money down? Market nowadays will be allowing for some kind of money up front I would think, and allow for you to pursue marketing and advertising efforts while getting something in the bank. Just a thought.

Thanks for your thoughts, guys.

The seller is a licensed real estate broker in Utah--he bought the home in 2009 for 10K, and I'm assuming is just doing a quick flip.

Before I signed the PA I got a rent roll, proof of funds, invoices on all new equipment, and a home inspection clause is included in the PA, allowing me to back out if it does not meet my standards. Further, the tenant has been paying on time to the property management company that screened and selected him for the property.

Steve--any chance you may be able to name that bank? I am seeking financing currently, and am having luck with smaller banks. However, I am paying a premium for seeking such a small mortgage (5.25% for 30-year fixed)

Would still welcome more thoughts! Thanks to all.

Hi All-

Been following BP for quite some time now, and you all have been exceedingly helpful in my careful plan to jump into my longtime aspirations of being a real estate investor.

I am a 23 year old recent college graduate, sitting in my first professional job, and recently agreed to a purchase agreement for a 3 BR residential home for $25,000. Already completely rehabbed, painted, turnkey property, and even already rented out at $650/mo until June 2014.

Due to it being my first time, I am currently struggling with financing. I have explored the avenues of private money/partners, but am more comfortable starting out with a standard mortgage. However, I have been told by some larger institutions that they do not lend under the $30,000 mark, which makes my financing plan difficult.

So, I want to hear from the BP community: 1) What do you think about my deal, and 2) how would you go about financing it? Any and all thoughts are welcome. Glad to become a part of such an intelligent and like-minded real estate junkies like myself.