All Forum Posts by: Joseph Wojciechowski

Thanks for all the info guys! I really like thinking of the holding company as a property management company. I'm going to start with a flipping LLC and get a few properties under my belt. Then convert to hopefully a 1:1 ratio of buy/sell one flip property to buy/hold for long term rental (possibly use BRRRR). That way my flip properties can fund the buy/holds. If I'm going to use a combination of hard money and conventional (maybe FHA) loans, I will need a LLC for hard money eligibility anyways. I know insurance has its place, but i feel more comfortable having a LLC as protection, especially if I'm building to 100 units.

I am an investor located in Michigan and in the process of developing a business plan but am struggling to figure out how to set up my LLCs with scalability in mind. Below is a rough outline for both a buy/hold and flipping business. I understand a parent/holding company is the next level of protection when you have multiple LLC's. Should my parent company hold all of my real estate LLC's even if they are taxed differently (such as between the buy/hold and flip business) or are parent LLCs designed to only protect the several Buy/Hold LLC's because they are of similar taxation? I know I am overthinking this too much for the current stage as an investor, but I'm trying to work backwards from my end goal of owning 100 units.

LLC #1 (convert to s-corp once turning a 40K/yr profit as recommended by CPA) for a flipping business.

LLC#2,3,4+ for Buy/Hold business (opening up new LLC after the previous reaches 1M in equity or property is in a new state)

Parent/Holding Company - to own all LLCs or just multiple Buy/Hold LLCs as they are formed?

Property Management business- created after acquiring about 20 properties. Can this business also be shielded by the parent/holding company?

On a separate note, if my personal home and all my business is in the state of Michigan at this point, would there be any benefit to designing the business as a series outline or simply a parent/child LLC set up where the parent LLC would be created in a more tax advantaged state such as TX, WY, NV etc? I plan to grow the business to multiple states in the next 5-10 years with the 100-unit portfolio goal at 20 years.

 Honestly I’m not sure how to set up private loans. I need to spend more time learning/understanding how to structure them. I have had zero exposure to details of private or hard money terms. Are there any general standards between rates for each loan type? I know conventional is currently around 8%. Would it be safe to say private could be 10% and hard money is 12%?  Do you have your real estate attorney draw up a contract and you sign with private lender before going to the closing table with property owner? I was meaning to reach out to the seller and find out if they’d entertain the idea of seller financing or subject to.  

I see there are 4 different types of rehab loans.

• FHA 203k
• Fannie Mae Homestyle
• Freddie Mac ChoiceRenovation
• VA Renovation Loan
• 
  I don’t want to be an owner occupant. So are there any specific pros/cons to home style vs choice renovation?
  

Thanks for the info guys! I knew I was essentially looking to BRRRR with my back up plan to flip. My financing knowledge is limited beyond conventional, private, and hard money. Definitely need to educate myself more so I can move quicker when the next deal comes up. I'll reach out to some hard money lenders and definitely look into the FHA 203k

As someone dreaming of passive income, I'm looking for guidance on creative financing options for my first property. It's a 3/1 duplex listed at $200k that needs a 3 month, $20k rehab. ARV is $280-$290k. It will rent for $2700/mo after reno. I have $60k of capital available but would like to limit my exposure and pull out as much of my investment as I can after the reno and refi. I can qualify for a conventional loan at 20% down but I wouldn't have quite enough left over for the $20k reno costs. Is there a way I can wrap renovation costs into a conventional loan? Or should I go hard money with a smaller down payment and refi to conventional after seasoning period? Any recommendations would be greatly appreciated!

Hi everyone my name is Joe! I just wanted to take a moment to introduce myself. Im currently working an hourly job but NEED a career change. I'm thinking about getting my real estate license to use the MLS to my advantage. I'm currently in the research stage of getting into real estate and looking to make connections in the Traverse City/ Northern Michigan area. My goal is to build up enough passive income through rentals to leave my hourly job in the next 5-10 years. I plan to initially buy fix and flips to generate enough income to fund rental properties to achieve my passive income goals. For starters I can be my own contractor (can do everything minus structural modifications) and my own landlord until income allows for it to be outsourced. Please reach out if you'd like to connect!