All Forum Posts by: Justin Kushner

Ok- Thank you everybody!

Hello, BP Community!

I am close to acquiring my first two SFRs in Alabama, and will be adding one in Indy shortly for a total of three.

While this is very exciting indeed, I am now getting overwhelmed with the concept of how to structure them separately so as to keep my finances straight.

At this time, I am not going LLC route, but rather the hefty umbrella policy route.

(I will probably transition them to LLCs in the Future).

I want to lay the foundation for CLEAN and EASY TO TRACK Finances... as well as PROTECT myself.

My questions are... 

Assuming I will have three properties... How in the WORLD should I set this up for BEST ACCOUNTING and TRACKING purposes? 

- Do you recommend a DIFFERENT BUSINESS Checking Account for each Property? 

- Does Each Property need its OWN BUSINESS Credit Card?

- Will my ONE hefty Umbrella Policy keep me safe from Personal Liability for a while?

- If I am going to move these into an LLC later, do I need to avoid paying for expenses for the property from under my own name, on a personal credit card, for example? Is this a major consideration in the beginning now?

Thank you all! I am SO EXCITED to get started, however, a bit overwhelmed now about how to keep it all straight.

Justin 

keep the whole amount, whatever it is!

Hello, community!

I have a question regarding Cash Flow, CoC return or (NOI / Cash Invested).

I've noticed one particular Turnkey Company out there are advertising a $300 cash flow per month for one property, after all the Operating Expenses they estimate are accounted for when financing a property with them at 20% down, 30 year 6% rate. That appears pretty good, right? Well... my question is this:

They did not include Vacancy (5%), Maintenance (5%), CapEx (7%), and the first month's rent they take (averaged out to be $66/mo first year) into their calculations. If I actually go ahead and subtract each of these amounts from the Cash Flow, it winds up yielding only $60/month. 

Is THAT normal? Is this a trick being performed by the Turnkey Company to "pad the numbers", or do most companies calculate cash flow & CoC return without accounting for Vacancy, Maintenance, CapEx, Other Fees?

Thanks!

Justin

@Bryan Richardson Thank you for the reply! So, have you found the only way to get a Bank to finance a purchase directly to an LLC at closing is via a "commercial loan"? Can you purchase it with a standard Personal Mortgage and just "Personally Guarantee" (whatever that means, I guess, perhaps, signing more documents saying I'll take the financial fall in a doomsday scenario)?

Thanks!

@Daniel Reyes Wow, thank you for taking the time to talk to me about this! As new to the community, it is these kinds of first impressions that are quite resounding for me.

So, a lender will allow me to purchase a property directly into an LLC if I sign a "personal guarantee" along with it, you're saying? What we are interested in are the staple kind of thing for now... single family homes in landlord friendly states, where the financials make sense :) Again, we want to do everything 50/50 and in an LLC for simplicity and safety from personal asset exposure.

What are the key words I need to use with these banks to get them to agree to purchase a Rental Property into an LLC, because I have spoken to about six NMLS ID# folks across several lenders who have just flat out said, "No."

Thank you!!!!!

Hello, BP Community!

"Long time listener, first time caller" hardy har har... I really look forward to hearing what you all have to say about this one.

The backstory: My brother and I are best friends and great business partners in general, when it comes to most things. We want to begin acquiring rental properties under a joint LLC that we both go 50/50 on. He lives in New York, I live in Florida.

I've already spoken to a number of Lenders (e.g. Wells Fargo, Watermark...) who tell me that I cannot purchase an investment property into an LLC at the time of Closing, and that it during closing my name, not an LLC name, must be on the Loan/Contract. These lenders also tell me that while I can move it to an LLC after the purchase, however, they technically could call the loan from me and require it to be paid off in full or moved back under my personal name. This is unlikely, they each said, and likely my only way of doing this.

So my questions! :

How are LLCs acquiring rental properties with Financing? 

Or, are they buying them cash without Financing? 

Do any of you have any experience going into Rental Property Investing with a Partner, and setting up the Framework for success? PLEASE PLEASE share your recommendations before we get seriously underway!

Thank you, and sorry for what I'm sure is a seemingly basic question.

-Justin

Miami, FL