All Forum Posts by: Ken Naim

@Dustin Corbett it sounds like an excellent investment and a great way to learn. You're background will allow to skip the 1-4 tenants phase. It is priced right so you can handle the vacancies, and once fully rented the NOI will be even better.

@Jake Hart it sounds like a good plan. Never done it personally but I don't see why not. It becomes a commercial zoned parcel with a commercial asset. Call the local propery appraiser and commercial appraiser before pulling the trigger.

@David M. If the mortgage is only thing in your name, and the bank account, lease(s), bills, other imcome and expenses are in the LLC name then piercing the veil is very difficult. It will be a factor if other aspects are not adhered to but if it is the only one not very likely.

Piercing the corporate veil is expensive from a litigation point of view and not something a typical attorney on contingency will go after.

Is the LLC bulletproof, hell no. Is insurance, hell no, there are so many exceptions and exclusions. Is there anything bulletproof in our society? No. Our civil court system has awarded judgments against black and white law. So there is always risk, that you must accept if you want to invest in real estate just minimize it as best you can.

Piercing the veil is possible but better than not having a veil.

The worst thing for me is to build a small fortune with hard work over time, the losing it on some frivolous lawsuit with an overzealous attorney.

@Frank DiGiorgio the only thing that might work from a real estate point of view is a cost segregation study on the new property. It could increase your deprecation deduction significantly.

Otherwise selling any stocks that you own that are at a loss or any assets that has a loss.

@Corey Farnsworth LLCs protect your personal assets from lawsuits related to the property owned by the LLC as well as protect the LLC assets from lawsuits brought against you personally, say a car accident resulting in a multi million dollar lawsuit.

Insurance is a neccessity as well but it is a first line of defense, so is a large mortgage, the LLC is another line. More lines between your assets and lawsuits the better.

When your first starting out skip the LLC as you don't have much assets to protect, and your very unlikely to be a target beyond your insurance.

Once you have a $$50-100k in a property then consider an LLC. For residential bank loans buy in your name then move to an LLC. Hard money lenders usually don't care and you will likely need to sign a personal guarantee if you're taking a high LTV.

It makes no difference to a realtor.

@Brandon Acevedo Yes. Your plan is great, you can rent your current house, and house hack the new house, refinancing into a long term loan when possible, as a primary residence you'll have the best rates. If you end up living in it for 2 years and sell before year 6 you'll get capital gains rates on the sale. Good luck.

@Pete Perez Yes, very. Commercial properties offer an opportunity for forced appreciation in several ways which can yield exteremly high returns and there is less competition at the higher dollar properties, still plenty but less.

@Carah Hanley ask a commercial broker or three in the area. And ask any commercial agent with national costar access agent that your friendly with to pull report on that submarket, property type and class.

@Tre Reaume in short it makes them more money. Only fear kawsuits if your equity is above 50-100k per unit or you're a high net worth individual. Start out residential and as your equity increases move the properties into llcs.

@Jennie Seitz 3 seperate mortgages with long term fixed rates will be cheaper in the short and long run. Closing costs might be higher with 3 loans; and i say might because commercial lenders charge points, and will require a phase 1 in addition to appraisal and other fees.

Rates are low at the moment but 30 year loan locks them in, and in 5 years rates will likely be higher and you'll have another set of closing costs. Not to mention that commercial loans are at a higher rate than residential.