All Forum Posts by: Bill Schrimpf

@Jean Bolger @Account Closed

Thank you both for your input. I'm glad i asked before I got into something problematic!

50% Rule and Condo HOA

The 50% rule looks like it's a rule of thumb for properties where the owner would be responsible for a long list of capital and operating expenses items such as roofs, HVAC, landscaping etc. Does it make sense to use a different percentage for a condo where the HOA takes care of many of these items?

Maybe 25%-30%, since it’s still prudent to budget for interior repairs and vacancies…

Thanks in advance for your thoughts!

@J. Martin - Thanks!

Thank you all for the info, I truly appreciate it.

@Will Bernard - Will you please expand on your comment about using leverage wisely? I imagine there are some obvious things to look for like credit/debt ratios, interest rates, loan terms, basically stuff I learned when purchasing my primary residences. What would be some tips that set the investor apart from the owner occupied point of view?

I've been interested in investment real estate, primarily in becoming a land lord, for 10+ years. I haven't done anything about it form an investment point of view but have bought and sold 2 primary residences. It's now time to do something, the clock is ticking, I want to retire from my 9-5 and have to pay from my kids college.

My goal is to have at least $100k/year free cash flow in 10 years or less, from real estate investment activities, primarily focused on buy and hold/landlord activities.

I've attended some conferences, read a few books and several of your helpful forum posts. I've learned a ton, THANK YOU!

Here are some questions I haven't seen the answer to on the forums. Perhaps someone can help!

1. Do I need an LLC (SP or other entity) or is good insurance enough? My net worth is very low. There is some high level discussion about this and the LLC crowd seems to say it's important for protection but I don't have much to protest, at least not yet! How I proceed with #3 below may impact the LLC question too!

2. How do you get profits out of an LLC? I will reinvest most of the profits back into the business but If I want to pay myself, $100/month for a kids college fund, how do I do that?

3. My long term goal is to build a portfolio of properties that generates free cash flow. I have some some starter cash. Whats the best way to utilize my cash, use it as a down payment (20%) on 2-3 inexpensive properties and finance the rest or just purchase a single property outright?

4. What is a good resource to find the average rents for a given area. I've found homepath.com but there has to be others...

Thanks in advance and I look forward to hearing from you!