All Forum Posts by: Account Closed

There are significant advantages as far as liability and protecting your personal assets when you use the sort of multi-level LLC structure that was suggested. Likely though it is not worth your time or money.

If you have significant personal assets separate from your LLC and/or do tons of deals (multiple monthly), then is might be worth looking into.

It varies greatly by state but generally each LLC requires a fee to start and a yearly fee to a registered agent or the state to keep the protection up. Paperwork multiplies, accounting get more complex (more expensive too), multiple bank accounts under different LLCs. It is a little much for a single person to comfortably handle and tax saving would likely be less than the cost of maintaining the structure (I'm no CPA though). Big headache unless your business is big enough to justify hiring someone to deal with all the yearly requirements.

In accounting the rentals are considers a fixed asset and the flips are considered inventory (there are other ways to do this too) in the same LLC. Your CPA should know and be doing this already. Not sure about the c-corp/s-corp thing but if your CPA is good he should know.

@Zamir Kazi I'll second what @Cal C. says about positive equity.

I've never done a short sale but I do know that they are generally a long drawn out process.

That is a great list of potential groups to target. Check out listsource.com/, you can get addresses to mail to by filtering to your specific criteria. Also you can try calling your local City/County clerk to ask if they can provide a list of homes with back property taxes too. Good luck!

You may be doing this already but make sure you are sending letters to people that would have a reason to sell under market. In other word don't send them to the first 1000 addresses in the phone book, buy a list of absentee owners, properties behind on property taxes, or people that have had the same address for a long time (like 20+ year and thus have a lot of equity in their home).

Most everyone thinks their house is worth more than it is. It is your job to explain why it isn't worth what they think it is. If they say their house is worth 200K then show them the comps that support a 150K value. Ask them if they were purchasing a house in their neighborhood would they buy the one for 200K or the similar one down the street for 150K? Let them work through the logic in their head.  Explain that those homes are recently remolded and in better condition than theirs too. Point out issues with the home that would affect value. Negotiate! This is easier said than done of course but start working on it and learning more about it.

Depends on your state and your portfolio. For my relatively small amount of houses I use the same LLC and different bank accounts for each. My state makes having separate LLCs for each property cost prohibitive for SFHs. Other states are cheaper and make the protection worth the cost. If you have multiple LLCs then each one will have to have have separate bank accounts anyways.

I mainly use Craigslist and it works well! I've also gotten some inquiries via Zillow as well, never had any pan out but it won't hurt and it is free.

as far a tenant screening goes here are some of my favorites

Monthly income? (verify w/ employer)

Past rental history? (again always check the references, otherwise you might as well not ask!)

Why are you moving? Let them speak, they will often tell you much more than they should. I find this is especially the case with less qualified/ shady tenants

Run credit/background check and pay for it with a non-refundable application fee. Before hand ask the potential tenant if you are going to find anything. Gives a good person a chance to explain...or to avoid wasting your time and theirs running their credit/background.

In general, ask any and all questions that come to mind. It is much easier to ask questions ahead of time and sound stupid then not ask and regret it later (which is seems like you are well aware of).

Do you have experience purchasing real estate in the past? I got my real estate licence when I decided to get into real estate but I'm not an active agent, I did it solely for the information. I still used an agent for my first purchase for peace of mind mostly. The next property I represented myself which ended up saving me ~$4000 which isn't bad for a ~$500 real estate class. I'm comfortable with the paperwork and would prefer to not have an agent when buying now. That being said agents do make things much easier especially if time is an issue or if you are unfamiliar with the buying process.

If you are new, then I'd get an agent. With a MFP I feel like an agent in that area could be a big help (though I have no MFP experience).  You can do it without one (really isn't that difficult) if you are motivated though. If you do use an agent I would definitely lean towards an investor minded agent that is familiar with MFPs. 

FYI when selling I'll always use an agent. Good luck!

@John M. It was the Knoxville real estate investor club, sound like the same one that you are talking about. They do have a very steep fee in my opinion, I'd go much more often if it was a more reasonable rate. As far as I can tell they are the only active club in town though which is a shame. 

If anyone knows of other groups in the area I'd love to hear of alternatives!

Howdy, I'm just down the road in Knoxville

Don't have much advice for you but would love to here what others have to say.

I've only talked to a few places in Knoxville on the phone, more because I was curious about costs and how it worked. Don't have a prop manager now but will consider one in the future. 

I was supposed to meet with Jacob Lei Prop Mgmt and we set a time to meet at their office. Arrived early, no one was there (mid-day on a weekday too), waited about 30 mins after our meet time and called them a couple times, no one ever showed up or answered. It was their office phone which is the same supposedly 24/7 hr line for tenants to call with issues. To their credit they called me about 30mins later to apologize. A few months later someone from Jacob Lei talked at the local RE meeting and seemed quite competent though. Not sure if I it was a fluke or if they are unavailable more than you'd like someone to be when you are paying them to be on call.