All Forum Posts by: Jesse Rivera

What are you hoping to get out of the extra time, work and costs of having the LLC? I don't know when an LLC starts to pay off if you don't have any partners. But with only a dozen properties in only 2 states I've definitely not found a use for one yet. This is literally asked monthly if not weekly. You can click on the magnifying glass in the upper corner I will repeat as I do every time. With thousands of members owning 10's of this quads of properties. Not one member has ever said an LLC saved them when a standard insurance policy. Maybe with an umbrella policy, if they are well off, wouldn't have.

You’ll pay more for tax prep, more for record keeping, more for financing but what will you get? It won’t be privacy, it won’t be asset protection. I understand if you’re going in with a partner and you don’t trust them enough to use TICs and insurance, but as a solo investor why?

Are you going to pay the corporate tax in California? Are you going to keep the separate bank account, keep corporate minutes? Pay for an out of state entity representative? Pay for insurance as a corporation? Great. You’re still going to be personally sued when something goes wrong. 

You have no more at risk than you do in your own home (where you probably have more equity.) or your own car (where you probably have more risk.) and we won’t talk about if you have a pool or a dog. 

Just get started, don’t let this stop you. 

@Henry Lazerow you tickled my brain with your Lightstream comment.  I'd forgotten about that type of loan.  And @Jesse Rivera, I did not know there was a low-doc or bank statement HELOC. That is interesting! Thanks for posting that nugget.

I am a software engineer working in Bay Area. I found out that:

Case 1. When doing business loan for 4+ units multifamily, my W2 can not be used to calculate DSCR. For the top tier area like Palo Alto where cap rate is 4.0%, LTV can only be limited to 40%~45%. For the 1.5M downpayment, the target price is only 2.5~2.73M.

Case 2. When doing residential loan for fourplex, my W2 + my partner's W2 can be used to calculate DTI. LTV can reach 70~80% even the cap rate is only 4.0%. For 1.5M downpayment, the target price can reach 5~7.5M if DTI is allowed.

Due to the big difference on target price, I raise this topic to confirm whether my understanding is correct or not.  I wonder whether expert can confirm this?

Because my DIT is low, maybe Case 2 for fourplex is my preferred loan type than Case 1 if I want to invest locally. Any advice is welcome.