All Forum Posts by: Kerry Mertz

Why not put more of your capital into real estate? You already have 8 units that cover your expenses so they must be doing pretty well. My guess is that you would make a higher return on real estate investments compared to the stock market. You can set up a self directed IRA to invest in real estate with your retirement account.

Options. There's no better feeling than knowing that you are growing a business that will support whatever you want to do in life and it will give you options that you never thought were possible.

There's a lot of conflicting advice out there because the answer really depends on your situation. If you have a lot of assets, then an LLC will give you an added level of protection. If you don't, then maybe an LLC isn't necessary, especially if you are buying your first property. Maybe you should instead look into an umbrella policy.

If you want to get better financing terms, buy the properties in your name. Once you have more equity/assets, an LLC might make more sense if you are concerned about asset protection. Either way, you should consult with a lawyer to decide which type of business entity makes the most sense for the type of real estate investing that you are doing.

It was $2950 to be exact for them to file the paperwork to set up the series LLC and $300 for each property getting transferred in. I also had to do some estate planning (which I used legal zoom to do) to set up a revocable living trust.

You should see if you can take out a HELOC on your condo and use that for down payments on rental properties in SC.

If you start an LLC to hold your SC rental properties you can get financing from a private lender and it will not be based on your credit. The mortgage is based on your credit if you buy it in your name, but if you buy it with your LLC, the loan will be based on the income produced from the property. As long as it cash flows, you should be able to get a mortgage on it. I have found that a lot of private lenders will only lend to an LLC. The interest rate will be higher from a private lender compared to conventional financing, but you don't have to have good credit. You can do a google search or look on BP for private lenders.

Make sure they are responsive to calls and emails. Make sure they are pleasant to talk to on the phone, since they will be taking care of your tenants. Ask how they handle evictions and late payments. Ask what their lease up fees are. Ask what their vacancy rates are. How long is the average turn around when moving out a tenant and putting a new one in? And most of all, you have to trust them. 

That's the key! Always invest for cash flow and appreciation is a bonus. Practice running the numbers with the BP calculators and soon you'll find a deal that makes sense. Don't stop doing your research either! There's always new things to learn in real estate investing. Good luck!

I wanted to say thank you to everyone that offered advice and to give an update on what I decided to do. I ended up calling Royal Legal Solutions (podcast guest #109 on asset protection). Scott Smith himself was not available but I spoke to his colleague, Kellie who has gone above and beyond to help me understand everything and to answer my questions. 

They recommended setting up a Series LLC in Texas (where they are located) which will hold all the other properties. What I did not know, was even though the Series LLC is set up in Texas, I am still able to put other properties from other states within the Texas Series LLC. The properties that are in my own name are held in a land trust within the series LLC to prevent the due on sale clause and to give anonymity. The Series LLC is owned by my revocable living trust (which provides another level of anonymity). Even though this is still more complicated than I preferred from the beginning, I'm confident that my assets are protected this way. If I ever got sued, it would take a lot of digging for the lawyer to find out who I am and what I own. The price is reasonable at around $3000 and an additional $300 for every new property that I transfer into the series. The Series LLC also allows you to do 1 tax return for everything.

The other asset protection company that I spoke to (Anderson Advisers) wanted to charge me $5000 for the initial set up and wanted me to set up an LLC for every new property at a price of $1500 each, which I think is outrageous. Not to mention, they rushed me through the initial conversation and would not return my calls to answer my follow up questions.

I just wanted to put this information out there for anyone else who is confused. I think the price is worth it for peace of mind and protection.

Check out http://www.scotsmanguide.com/ for some options.

Hi @Edward Schenkel, I just posted this earlier today and I'm wondering what your advice would be:

https://www.biggerpockets.com/forums/109/topics/50...