All Forum Posts by: Dani Beit-Or

I not familiar w/ this program but I will say one thing I have seen over the years - what would YOU like to happen at the end of the program? 

I have had many investors come to me after spending good $$$ on different programs (not the ope you are referring to) only to realize they spent 50%+ of a downpayment on a house but are still not owning one or not even sure how to buy one (very sad in my opnion).

Paying for coaching and program is a good way to have systems, structure, support, education but I think it needs to be both a reasonable price + real (REAL) results orianted. 

I found this one an interesting scenario and would love to know what you learned or decided to do after your research is completed. 

I wish I has the wisdom to share . . . 

I assume (and hope) you have conducted w/ an att. and who knows entities and taxation as this is a classical case for it. 

BTW, ta good title co. would be about to assist as well

Here's a protocol you can use or use as a template and make modifications. 

On distribution you can distribute funds as follows:

1. Return of principal investment 

2. X% (say 15%) of profit first goes to your money partners

3. $#### bonus to money partner ($1000-5000)

4. Y% (say 25%) of profit goes to you

5. Rest of profit divided 50-50 between money partner and you

My question to you is what happens if things do go according to the plan and more money is needed? even worse more is needed and all/some of the partners don't want to contrinute?

As much as I know it is 1 year as well. 

BUT if you are the owner you maybe be able to get the homeowner exemption (250k/500k) and may not need to do 1031 unless you need more than 250k/500k

Hi, 

1 - there are so many variables that make it hard to answer this one. Also, your risk tolerance and available funds. Personally, I rather buy at a better school for a bit higher price on the expenses of cashflow - but that's one way to go about it. 

2- I try to avoid liability, and additional maintenance cost, and also the local municipality may demand from time to time to add more safety features and make changes that I can't avoid and it will add expenses. 

3 - there are many factors at work when choosing a property. Age is another factor among many to consider. I like 1980 and after but have looked at no older than 1960.

4 - 3/2 preferable. 3/1.5 could work too

5 - I live in Ca but invest out of state. in much healthier and stronger economies than you mentioned and where it is easier to find a 3/2, 1990+, w/o a pool, in good schools, that will generate a positive cash flow after expenses and mortgage payments and in states that are landlord friendlier. 

My suggestion: Id 3-5 possible ones and try to compare them one to another instead of trying to find the one. AND keep in mind there is no perfect home. You'll always need to compromise on something such as age, price, schools . . .

Good luck

Make sure the person you are using has actual experience, and not theoretical one, w/ the niche o investing you are conducting.  

Asked to speak w/ references w/ similar needs as yours.

Some 13+ yrs ago I went online and google CPA, contacted 10 spoke to 4, and picked one who seems the best fit for my needs.

Worked w/ her since. never met her in person once.

From my experience there are typically two main reasons why you would consider using LLC or not:

Risk/liability

Tax

Over the years I have noticed many attorneys who want to sell their services and products put fear into investors, especially beginners, about investing only through LLC.

From a tax perspective, I would suggest exploring this conversation with a tax expert.

Former risk/liability perspective here's how I would approach this question:

Let's say you invest inner lower and property with a higher risk of issues, say the cost of the property is $50,000 and you anticipate high potential risk class you're buying the property for cash.

For me, such a scenario that has higher risk I speak to it and no mortgage is a classical case to consider using LLC. I would see the loc as another layer of protection in My overall protection skin such as insurance and maybe even umbrella insurance.

Now let's take another somewhere you. Let's say you're buying a nice middle-class rental for 200,000 and rent it out. And in this case, you actually want to use a mortgage. In order to obtain the amazing mortgages we have here with the Amazing Race, I should say super-low rates, the bank he's not willing to lend to an entity only to an individual.

Now, is there a work-around for such case? The simple answer is yes, you could quitclaim the property from yourself 250. The more complicated answer is if you do quitclaim the property you will be in breach of the mortgage agreement in the bank May exercise the due on sale clause.

The third scenario would be to buy commercial property using commercial lending any such instance buying and financing for an entity is quite common practice.

So, coming back to the beginning of this answer it's all about the type of investment you're looking to do and the risk involved in doing so.

I do want to share my two cents on the matter. Please allow me to say that I've been investing primarily in rental properties for the past almost 20 years. Any my career I've been involved in more than 4,500 transactions buying rental properties in more than 50 US metros. What it sounds like I'm trying to show off, I'm only trying to bring some credibility to my writings.

For the past 10 plus years every time I speak about real estate investing I get asked about llc's. Every single time. And before I answer no matter which room I mean I'm always trying to find out who has a story to share about how the LLC saved his investment or not having one hurt him. I have probably asked this question more than 200 times on 200 different occasions.

Today's date I only have one story but someone told me about their experience, it to keep it short duck couple were sued by a person who cross their front lawn, off the rental property, and broke his leg. The person sue them for $50,000 and their insurance scheduled on $25,000.

The reason I'm telling you this story is to show you that such stories are rear. I'm sure there are stories out there but the fact that I am unable to find such stories, and I'm really really searching for one, tells me there is more motive by attorneys tell us fear stories than the reality actually is. Once again I'm sure there are more stories out there.

Full disclosure I am not an attorney and I hope you will use it's not common sense at least approach legal advice on the matter to make the best decision to your specific situation.

Good luck and Happy holidays 

Where in MO?

I'm in S. CA and are actively investing in KC and St Loius for the past ~2 yrs and are pleased. 

Also in what type of properties is also an important question. 

We have done more approx 100 transaction in the past year 

In the ideal scenario:

1. You qualify for a mortgage 
2. You find the house
3. Make an offer (+include your pre-qualification letter)
4. IF/when accepted - during the inspection period you bring GCs to give you bids 
5. Based on the bids and an inspection report you can determine what to do next - proceed, terminate?

If you plan to live in it why do you need a property manager?

Few suggestions:

• Make sure you have a scope of what you want to be done in the house before you bring GCs on site
• Try to have a longer inspection period (14 days, or more) you will need it to have time get GCs and your scope.
• These days on a new listing 14 days inspection period is VERY long - maybe try to tackle houses sitting on the market longer.
• Hire a project manager and/or a designer to work with you - unless you carry that ability or doing a lower-end home. 

There is much more to it but wanted to give you some direction. 

@Bao Chau Tran after 16+ investing years and 4500 transactions I'd say you can either use a prop. manager or manage yourself. 

If you use a PM they collect the rent.

If you self manage you can use diff. methods to collect the rent from the tenants such as Venmo, PayPal, e-check, regular check, and other online platforms that assist w/ such. 

If using a PM all calls directed to the PM.

If you self manage all calls/texts/emails will be directed to you to handle. How to manage such calls/issues is a whole other chapter in the book.