All Forum Posts by: Jason L.

I just inherited a tenant who was paying my old PM via money orders (she doesnt have a bank account). I want to get her off of using cash/mo because I am a long distance investor and I don't want to deal with payments in the mail. My plan for her is:

Plan A: I offered her a deal -- open a bank account (I recommended Chase since they have one of those "open an account, sign up direct deposit, and get a $200 cash bonus" promotions right now), use it for the rest of this lease, and I won't raise your rent on your next renewal. By forgoing the rent increase, I'm probably costing myself about $120 ($10/month), but I think I make up for it by getting her off money orders and onto electronic transfers. Will make my life much easier!

If she doesn't take me up on the offer, then I told her she'll have to start depositing into my account instead of money orders. I stressed that if she chooses this route, then she should expect the rent increase on her next renewal. Hoping she complies with Plan A, but I'll settle for the deposits into my account over cash/money order.

 Nice example, Tom. In addition to higher payments, I think another forgotten aspect is the double closing costs, which for a ~$150k house could be $5k on both ends of the financing process. 

People focus too much on this forum on "rules" and minimum thresholds to the point of the very same analysis paralysis you're currently having. There's no one-size-fits-all approach to investing (in anything): beauty is in the eye of the beholder. If you like it, then buy it!

However, I'll leave you with this: you shouldn't have to squint to see if you like it.

 Thanks! Well competition. First 3 properties I put offers in got bought over asking and all cash. So this one got at asking. Got it fast before agent could get the full week if offers. I'm guessing could have been sold for $110k.

If I can rent out each at $700 per unit. My property manager is confident as I just spoke then that improves my margins! 

 What changed with your property manager's estimate, other than you balking at the original deal? In other words, why wasn't the PM "confident" about $700 back when they told you $650? Not for nothing but the PM is highly incentivized (i.e. they get nothing unless you buy) for you to buy this house. I'd want to know exactly why they are so confident now but weren't when you first asked them. Ask for hard evidence, not just their most recent opinion.

My long-winded way of telling you to do your own research and rely on that. Go on Zillow/Trulia/Redfin tonight and look at all the comparable 1 bedrooms in your area to make your own determination as to what the unit will rent for. You don't want to be in a situation where you HAVE to rent it for $700 to feel good, but the market is only telling you $650 or less.

I'm working on closing one right now with a local credit union. Rate is higher but not untenable. 

I'm in the process of getting a HELOC for an investment property. Good news: I found a credit union that will do HELOCs for investment property (Space Coast CU; 70% LTV, 6.25% interest only). Bad news: they will not loan to an LLC. They have asked me to transfer the property to my personal name.

@Nicholas Aiola I am trying to get a loan on my rental, owned under an LLC. The credit union is requiring me to transfer ownership from he the LLC to my own personal name. I saw on LegalZoom (https://www.legalzoom.com/personal/real-estate/pro...) that a deed transfer costs about $300 for the state of Florida, but I don't know if a transfer of deed also triggers a doc stamp tax as well. 

My question is what should a simple deed transfer from a single member LLC to an individual cost (i.e. - does it trigger any taxes?)?

I say this as someone in the rare subset of humanity who can say I was both a former-college dropout and someone who now has both a bachelors and an MBA: finish school. 

You need more than a dream to justify dropping out of school. It'd be one thing if you already had a model of success and some income to fall back on, but it seems you're dropping out to start from ground zero. When I dropped out of school (sophomore year, just like you), I had a side business that I had already been working on part-time for over three years. I didn't drop out just to start the business. And even after I dropped out and thought about how I planned to run that business forever, the truth is that I eventually got bored with it, sold it 5 years later, and then went back to school anyway. What happens if things don't go as you planned?

The reality is that you probably won't have enough work to make up the time you're getting back in your week anyway. I know you probably think "studying" can take up 40 hours per week, but you're going to quickly find there's diminishing returns on just reading books and sending LinkedIn requests all day. The majority of your progress will come from actual field work, which as a startup agent/investor is just realistically not going to come by very quickly. You're going to end up just sitting around a lot. It takes time to build your business. It's why a lot of agents starting out also have side jobs.

So why not just do real estate and school symbiotically? Cut your coursework in half and then use the other half of your time to do the real estate exam and eventually sign with a broker. It's basically the equivalent of a working internship, which plenty of forward-thinking students like yourself do. This makes far more sense than just dropping school cold turkey -- especially when you're half way there already!

@Daniel Schiller I was talking to a credit union; not a bank. They said no to the LLC. Maybe I was just talking to someone who didn't know any better though.

I am looking into refinancing one of my rental properties, which I own under an LLC. The lender requires that I move the deed into my personal name in order to get approved. Some questions I have as a result of this:

1. To anyone who has done this before, what kind of costs are associated with this?

2. Is there anyway to co-sign a loan in my own name with the LLC instead of a transfer? Any other potential workarounds?

3. I do not currently nor have I ever owned any property under my personal name, but I was planning to use some of the refi money as a down payment for a primary residence. I'd like to try to buy a primary under a first-time home-buyers program like FHA, but I'm afraid that transferring ownership of my rentals from my LLC might disqualify me from these first-time buyer programs. Would I be correct in that assumption?

Any information you may have would be appreciated. Thanks.