All Forum Posts by: Kevin Jung

@Joe Villeneuve Thanks for the reply.

I don't think I mentioned this, but the business credit card would have a 0% apr for at least a year or so. So it would be interest free for at least a year. And at worst case, I could pay off the 10K easily within a year. Or perhaps do a balance transfer. 

I understand even with the minimum payment, it would eat up the cashflow, but even then, it will let me acquire a downpayment on a property. 

I've been thinking of creative ways to fund real estate properties and can anyone tell me if this works or not?

So I have a single member LLC. Instead of ***contributing from my personal bank account to LLC's business account, I know you can give a ***loan to the LLC with the proper note, interest and etc.

Then is it possible for the LLC to use its business credit card + plastiq (paypal, and/or other similar platforms) to pay myself back?
So for example, I give a $10K loan to my LLC from my personal savings. On the promissory note, it might say something like "no payment for 1 month, and full payment + X amount of interest paid back in full on the second month." And on the second month, the LLC would use its business credit card and plastiq to pay me back. Thus, I would have my $10K + few interest (which I believe the interest is taxable) back, and the LLC would have $10K debt + fee from plastiq, on its business credit card.

Would this strategy work? It'll be really cool if it did. I haven't seen anywhere that discusses this method. It seems a bit scratchy, but I don't see why it wouldn't work except for plastiq, paypal, and other platforms not letting you do it.. 

I apologize in advance for the lengthy post. 

A little background: I own 2 rental properties in TX. Both are under my name, and not in an LLC. (I don't plan on getting them under an LLC right now.) Anyways, I created my first LLC in TX (member-managed) last month after finding out about the business credit side. I got my EIN, Duns, business checking/savings account, and just got approved for a 10K business credit card.

Q1: Can I use this LLC & its bank accts to manage both of my rental properties' income and expense; **even though they are not under an LLC? I will keep good books to separate the two or hire a bookkeeper.

Q2: I plan on investing in TX primarily, but I'm in MS temporarily and want to buy a property in MS soon. What are the details for setting up LLC in MS? I figure set one up as a member-managed, foreign LLC tied to my TX LLC? Do I get a new EIN/Duns # again? Doesn't that create a whole new business credit score?

Q3: But I also want to get a Series LLC in TX (I screwed up.. should have created one in the first place). Should I just use my new TX LLC to manage the 2 rental properties I have and create a completely new Series LLC?

Or should I convert it to series LLC? If so, how does converting LLC to series LLC work since I have bank accounts, EIN, and Duns #? Do you update all of them to the new series LLC name? Does my business credit score follow along?

Will it have issues with having MS LLC tied to it? I read that series LLC should keep in-state properties only. And MS also doesn't recognize Series LLC.

Q4: In the future, once I get the Series LLC, I read I could have a different EIN for each children series. But wouldn't that create a whole new business credit score for them? Do you have to file separate taxes for each children series that have an EIN?

Q5: I watched a bunch of Clint Coons's youtube videos and he mentioned that you should create a management LLC to manage all the income/expenses for all the children series LLCs. That's my primary goal and I don't really care about anonymity such as setting up one in Wyoming, Nevada, and etc. But Question is, is that management LLC part of the series LLC or a separate LLC?

Thanks so much for taking your time to read all. 

I'm looking at a duplex with crazy cash flow but it's in a really bad neighborhood. Bunch of thieves, dogs, and drug attics running around. Pretty far from any restaurants, markets, and such. But it has 2 tenants in place already, who are paying $900 per unit. Have not had an inspection yet, but expecting to see few problems like needing a new a/c and it's also in a flood zone (with stilt height in place). I remember not to mix personal feelings towards buying an investment property, but I just cannot help myself.

So should I put an offer on a property with crazy cash flow that's in a bad neighborhood and possible problems with the property? I would use property manager since I live in a different state.

Listed $139,500. 20% Downpayment ($27,900). 

PITM (Mortgage, Insurance, flood insurance, taxes)= $838

Rent = $1800 (900 per unit) {each tenant has contract until May 2022)

@Joe Villeneuve Hmm, Okay. I 'somewhat' understand (still new). Thank you for your input.

But I don't plan on refinancing for a while. I'm still shopping around but the rate I have in place for hard money for $145K is

30Y, LTV: 80%
Points 3 = $3,480.00, 
Transfer/UW Fee $2,174.00 
Title/Transfer Fee $4,000.00
HOI/Taxes Fee $2,500.00
First 4 payments Due $3,059.02
DP 20% = DP $29,000.00
Total Cash $44,213.02
Estimated Mortgage $871.00

I don't have experience with flipping and zero knowledge of fixing a house (would love to) so my strategy as of now is just to buy and hold for the CF and equity; long term.

@Joe Villeneuve Thanks for the reply!

My bad, I meant the property management fee of 15%.

My estimation. Renting to market: $1250

Tax $89.00 Insurance $136.00 Utilities $- HOA $58.00 Lawn $- Vacancy $100.00 Repair $50.00 CapEx $100.00 Property Manager $125.00 PMI $- Mortgage $588.00 Total Expense $1,146.00 Cash Flow $4.00 Annual CF $48.00 NOI $7,104.00 COC ROI 0.12% Cap Rate 5.07%

My estimation. Renting to military: $2500

Tax $89.00 Insurance $136.00 Utilities $300.00 HOA $58.00 Lawn $- Vacancy $100.00 Repair $100.0 CapEx $100.00 Property Manager $375.00 PMI $- Mortgage $588.00  Total Expense $1,846.00 Cash Flow $654.00 Annual CF $7,848.00 NOI $14,904.00 COC ROI 17.42% Cap Rate 10.28%

Still no?

Bunch of questions for my scenario; please help!

Considering buying a townhome near a beach. Lots of vacation rentals, casinos, and a military base nearby.

Listed: 140K, Offered 140K (in my name as of now). HOA 58/month, Tax 89/month, Insurance 136/month. Rent nearby 1200-1300/month.

So I did the math, and the rent pretty much cancels out the mortgage with 0 Cash Flow. **BUT** the place has a bunch of military folks coming in every week for training who stays for 4-7 months. They get at least $2500 a month to use for lodging. If they don't use it, they lose it. How do I know? I'm one of them. Other investors already taking advantage of the system. So potential $2500/month rent with 500-700 CashFlow, which is my goal.

Q1: Is this investment worth the risk? I ready talked to the property manager that deals with military folks and agreed this townhome can be listed in their system for rent. But they charge 20-25% of the monthly fee. And I would need to spend around 5K for furnishing it. 3bed/3bath.

Q2: There's 2 other exact same property listed and hoped to get a partner to buy all 3. Is anyone interested? PM me please!

I have only around 40K cash so I plan to use Hard Money, 20% down, 4-5% with 2-4 points, and some other fees. (Don't qualify for other loans due to income history and DTI. Good credit of 780). I put an offer already using my name but am in the process of creating an LLC, ASAP.

Q3: I was hoping to create a business checking, business CC, and hopefully business LoC as soon as I got my EIN. But since it's my first LLC and no business credit, I don't see myself getting a high limit on any of those even with my credit score of 780. I was really hoping to use the business credit card and pay myself using plastiq. And using it as downpay and other costs for this property. Cuz I might be short on a few K's, which I can borrow from friends and family, but I rather use the business credit strategy. Any opinions here?

Q4: First time using hard money, so not an expert. I plan to move all my money to business checking as soon as it's formed. HM Lenders are asking for a statement or proof of funding. Does this work?

I purchased a townhome in TX last year. Purchase price: 300K, with 10% down on 2.25% with my Mom and my name on title/loan. Currently, 3 friends paying rent which covers the mortgage. Plan to rent it out to 'actual tenants' (not friends & family) sometime next year in summer.

So I am paying PMI right now. The comp shows exact properties like mine are being sold for 400K right now. Which just gave me 100K equity. I know the rates are still low right now, but no guarantees for next year or so.

So the question is, should I refinance it to pull equity, get rid of PMI, and transfer the title to myself or LLC later? (or should I use portfolio lender to just refinance as LLC in the first place?)

Is it worth the risk of losing the low interest rate? My CPA suggested it would be better to keep it as it is and should be fine renting it out with my mom and my name on it and just getting umbrella insurance. Any suggestions?

Hi, Quick background: I live in TX, but temporarily in MS for work. I found an awesome investment property in MS and currently looking at hard-money & refi after. I have 2 rentals in TX that are not in an LLC.

After looking at all the pros and cons, I decided to set up my first LLC.

Question: If the property I'm purchasing is in Mississippi (Rental-buy & hold), should I create one in TX or MS? Is there a potential risk of double taxation between the two?