All Forum Posts by: Keith A.

Thank you for the responses and we will run this by the recommended experts. The financing makes sense that they will look at is personally which is not a problem.

So we would create an LLC as the holding entity. When you say a separate entity for PM, would that be another LLC just for handling the income/expenses from that property? I thought that each LLC would be linked to a bank account that only dealt with the expenses of that property. This part I am a bit fuzzy on and how it scales to 10 or 20 properties.

Also, if you know of any book references in this I can research there as well. I like to find out as much as possible so when I talk to the experts I can understand better.

We (father, brother and I) are going to setup a business to buy and hold real estate. I have read a lot of articles here on entity structure but do not know which one fits our scenario.

We have a large sum of funds available to invest and would like to setup the entity structure with all three of us as equal partners with taxes and asset protection in mind. We will definitely seek a professional but wanted to get your take before. The ultimate goal would be to use this business to replace our jobs down the road.

Also, in this scenario how do you finance loans with this type of business. Does the lender look at your personal finances including the business or only the business funds?

Thanks Luis. Sounds like I would need to find out why cashonly when looking deeper.

I have a question about cash-only deal requirements.

I've noticed some listings will say cashonly as a requirement. In this cashonly 65K deal, it is a shortsale and the place needs work. Does this cashonly requirement indicate that there is an issue with the property that a lendor would have financing?

Howard, those expenses are included in the 50%. I was using this to be conservative.

Joel, I agree that the level of due diligence you mentioned needs to be done to validate that return. This is just a screen to take a closer look to pursue.

Dade and Broward contain large cities like Miami and Ft. Lauderdale and like any large city there are rough areas. There are several surrounding areas that are nice in these counties.

I am in dade/broward county and also keeping an eye on west florida.

It is a mix of C and D areas. I'm really just beginning to analyze the different areas of the surrounding counties to see where to maximize our investments. There are foreclosures everywhere so the values are still in flux and short term appreciation is questionable.

Thanks Jon. Yes, will definitely do the proper due diligence.

The 1185 is what the tenant is actually paying today. It is not an estimate.

I've been coming up with a strategy for buying properties with a minimum of 15% ConC return. When looking at properties in the area and the amount they rent for they seem to hit the 20% ConC return easily. This is without any price negotiation and selecting properties with tenants already in place for actual rent numbers.

Are others seeing this type of return? I'm thinking I may be missing something so I thought to post one of the deals to get input on.

3bed 2bath
Asking Price: 65K
Gross Income: 14,220
Using 50% rule: 7,110 NOI
Debt Service: 3,140.40 assuming 30yr @5% with 25% down
Cash Flow: 3,969.60 at about 20% ConC return

Please let me know if this looks right and if 20% is a better goal in this current market. Could even be 25% with negotiation.

Thank you for your input!

Thank you for the responses. Currently we have 300K in cash and will have the rest next month. Enough to get going.

We are in south florida so we were thinking to start in these areas and even west florida if it makes sense. Once we are comfortable that the numbers are working and gain the experience we can look at investing outside the area.

I agree J Scott. We want to see the actual numbers come in before commiting more of the cash. We are definitely weighing that risk against the market opportunities.