All Forum Posts by: Luke Perrin

@David M.@Michael Plaksand @Mitchell Zoll

Thank you all for your responses. Your comments have helped me process the decision, but this still seems like a complicated issue. 

I setup these LLCs with Prime Corporate Services based on Pace Morby's recommended structure as of the beginning of 2023. Colorado LLC law is weak when it comes to asset protection, and that is part of the reason I wanted to have a Wyoming LLC holding company. I've never worked with an attorney, and that is clearly a problem. Would I be better off just having an umbrella insurance policy instead of LLCs?

@Christian Block and @Michael Plaks

I'm confused about your comments on filing a partnership return in Wyoming. I understand that it may not be a community property state, but they have no state income taxes and I'm not doing any business in Wyoming. Do I still need to file a return there?

My wife and I own 2 rental properties in Colorado that we are working on getting into LLCs for asset protection purposes. I also have a single member LLC for work. We have a Wyoming LLC owned 50/50 between the two of us that is a holding company for the 3 Colorado LLCs, all owned 100% by the Wyoming LLC. My wife and I file our taxes jointly. Our tax CPA said they can file one tax return with the LLCs being tax-through entities, but they are concerned this may negate the asset protection of the LLCs. I am wondering if filing using Schedule C or E with all of the LLCs on the same tax return will allow for someone to go after all of the assets together if we were to get sued. Any advice would be amazing!

@Jason Waldo - Thanks for the info! That sounds like a great way to finance this deal and future deals. Is that through a bank or a private lender? And is there are name for the type of loan you have? 

House looks great! Congrats on the cash flow!

I can tell you did a full remodel of the kitchen and bathrooms, put in new steps to the new front door and painted the exterior. All of that looks high quality!

What other changes did you make to get the ARV to 300k? What LTV were you able to get for the cash out refi?

If you only had a hard money loan for 2.5 months, were you able to get a cash out refi at that time? My understanding is you need to wait for a seasoning period of 6 months after purchasing a property before you can cash out refi. Is that not the case?

Thanks! @Sarita Sherpereel

@Joe Velleneuve the current cash flow is $1700 per month. We have short term tenants in there for 6-12 months. Their homeowners insurance is paying us directly for their rent while their home is renovated after a fire. We got really lucky with the tenants on this one.

 @Bob Smith

Check out the website for the Joint Center for Housing Studies of Harvard University. There is tons of information on the site. Among other things, it shows net migration to and from each state. I'm hoping they will have an updated study coming out soon for this year's migration. https://jchs.harvard.edu/son-2022-migration

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $454,000
Cash invested: $22,700

3 bed 2.5 bath 2 story home with unfinished basement

What made you interested in investing in this type of deal?

We wanted a nicer home that would attract (hopefully) better tenants at a higher price point.

How did you find this deal and how did you negotiate it?

We saw the home while driving around our town. This was new build so we had little negotiating power. We offered full price plus $5k and asked for $5k credit towards closing costs.

How did you finance this deal?

5% down through a local credit union

How did you add value to the deal?

House came with 2 heaters, one for upstairs and one for lower levels. Only had A/C on top floor that was supposed to "trickle down" to lower level. We added a second A/C unit to make it a true dual-zone heating and A/C home. Added lighting and electrical outlet to a bonus room under the stairs.

What was the outcome?

Cash flowing property with increasing equity

Lessons learned? Challenges?

Different builder with different building issues and much more difficult to get them to warranty their work. We had to constantly call, text and email about each issue until it got handled.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

Kelley Spight with Elevations Credit Union is amazing to work with. She is great with communication and always gets back to us with answers to our questions in a very timely fashion. Highly recommend her to everyone. Plus, they have excellent interest rates compared with banks.
Nicki Schreibvogel is a great real estate agent who works hard to find the house that fits your needs. She and her husband are investors who know the business well.

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $327,000
Cash invested: $16,350

New build. 3 bed 2 bath ranch with unfinished basement. House hack - acquired with 5% down as primary residence.

What made you interested in investing in this type of deal?

There was instant equity to be gained and we wanted a new home.

How did you find this deal and how did you negotiate it?

This was a new construction home. I saw signs in my area advertising a new housing development. My wife and I chose the lot and a smaller ranch home to maximize the equity gained. Paid $5k over asking price but asked for $5k closing credit to minimize out-of-pocket cost.

How did you finance this deal?

5% down payment using a local credit union

How did you add value to the deal?

Added fence and backyard landscaping with sprinkler system. Doubled size of concrete patio and added concrete walkway from driveway to back patio. Installed new shower doors in both bathrooms and updated shower heads. Upgraded to LED lighting. Upgraded kitchen sink and faucet. Installed garage hooks for tool storage.

What was the outcome?

Great cash flowing property with increasing equity

Lessons learned? Challenges?

New builds come with their own projects. We thought everything would be perfect when we moved in, but we quickly realized there were tons of little things we needed the builder to complete or fix during the first year. As long as we kept bugging the builder, they were there to take care of the little issues we had. Each project seemed to create more projects.