All Forum Posts by: Irina Badal

Ok, thank you for input. I agree with complications of ownership when it comes to Land Trust, and it also does nothing for asset protection. My other question is what is a good asset protection strategy for RE investments ? I reside in CA and thinking to invest in out of state. I know there has been a lot of posts here about not over complicating things but I get nervous when I hear it just takes one case to wipe out the entire wealth :)). So feels like a roll of a dice to me.

A child gets exposed to fentanyl in the property, CO poisoning, or someone gets shot in the property and then landlord gets sued. Unfortunately, insurance may decline for one or another reason.

Watched some You tube videos about some ways, specifically creating a property LLC with WY LLC being a member manager LLC for the property LLC.

Appreciate all thoughts.

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I heard for anonymity purpose it’s advisable to set up a personal residence trust. Is it the same as land trusts ?

Also, if I don’t have the right person to name as trustee, is there any more economical option other than a corporate trustee ?

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Quote from @Account Closed:

I ran some numbers for you using the Cashflow Analyzer Pro from AssetAFC.com (see the attached picture).

From my perspective, this deal still looks acceptable, even though it won't cash flow in the first year, assuming a 5% vacancy and 5% for repairs. In the second year, assuming the same vacancy and repair costs, the cash flow would still be negative by $46. Many new investors tend to focus only on cash flow. However, investing is a bit like cooking; cash flow is just one of the ingredients needed to keep things moving, but it's important to consider other factors to make it a tasty dish. That's why this tool breaks down various components like cash flow, principal paydown, home and renovation appreciation, initial equity, and depreciation for potential tax savings. It shows individual gains and ROI over a 30-year period, which helps identify which factors provide the highest returns and make informed investment decisions.

In your case, even if you're not cash-flowing in the first year, since the negative cash flow is minimal, I’d still go for it. Between principal paydown and home appreciation, you’re still likely to make at least 40k per year, with that amount increasing to 46k in the second year and 52k in the third.

To make this a worthwhile deal, I think you’d need to hold it for at least five years. The rule I use is to double the money after five years in case you need to sell.

Meaning, with your initial investment of 132k (down payment plus initial closing costs), and considering an additional 5% closing fee of the home’s value when you sell (roughly another 30k for agent and lawyer fees), your total upfront cost plus closing on sale would be around 162k. I look for a return of at least double that, so 162k * 2 = 324k. In your case, based on your assumptions, you’d reach around 384k, which is in the right range. Overall, I think this is a good deal.

Obviously, you’ll need to do your own due diligence as well—considering things like the area, tenant profiles, community growth, etc.

Thank you, John. This was very helpful

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Hi all. I'm totally new to REI, learning some specifics including deal analysis.

I would appreciate if experts here could review and advise whether it's a good deal based on the numbers I plugged in for CoC. Seems like this property is not really cash flowing on year 1 or 2 but there is a good potential for appreciation if I buy and hold.

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Hi. I’m new to BP. I would like to buy my first investment home. I have built enough equity in my primary home. I have cash too. What would you advise to do to pull some equity to pay for down payment and invest cash into syndication with 17% annual return or just pay cash for down payment. What would be the wise thing to do ?

Thanks for your input.

1 Vote

All Forum Posts by: Irina Badal

Irina Badal has started 3 posts and replied 5 times.

Post: Living trust/personal residence trust

Post: Living trust/personal residence trust

Post: Deal analysis and CoC

Post: Deal analysis and CoC

Post: Home equity loan vs cash for down payment