All Forum Posts by: Maggie L.

Full disclosure - I'm a buy and hold investor so I'm terribly biased. There are risks, but if the numbers look good (remaining monthly mortgage, systems in good shape and no differed maintenance) a good management company might be just the thing.

A few general questions I would ask to start.

1) What does you ROI/cap rate look like on this property? How does it compare with the local market where you are moving?

2) Will keeping this home make it harder (mortgage payment potentially making it difficult to get loans in CO) or easier (monthly income and ability to pull out equity for a downpayment) for you to make future investments?

Since I work a lot with other investors (investor-friendly agent) how you answer these questions would lead to a half dozen others, but hopefully these two will steer you in the right direction.

Let me know if there's anything I can do to help.

Like everyone else here, I have to give the not an accountant or lawyer disclaimer.  

I will say you should talk to them regardless of the fact that you'll probably get four different recommendations from four different people.  Make sure it's someone who is knowledgeable in these areas, and do your own research (because everyone should enjoy reading through state statutes and IRS code) to make sure you know what's going on.  If they can't tell you the relevant statutes (aka send you the citations or documents to read yourself) I personally wouldn't put too much stock in their advice.

Since, like me, you have the joys of being commission based (I'm an investor-friendly agent) you know that you need to pay estimated taxes quarterly. So, if you elect to be taxes as an S-Corporation and make yourself an employee aka dealing with payroll you also have a potential way to wrap in some of the administrative side of being an agent. Trying it out with your investing LLC may at least give you insight in what you DON'T want to do as an agent.

Personally, I think a series-LLC sounds like the closest fit to what you're considering. I don't know if you should elect to be taxed as an S Corporation (or if that creates any issues with the series-LLC) but S Corp election does offer a hybrid between LLC and Corporation that may be beneficial.

I'd second the recommendation of Continental Title.  They're knowledgable, offer quick and thorough turn arounds, and they keep my investor clients happy.

@Kyle Grimm congratulations!  I've also found writing down goals are the way to get things done.  I have yearly, monthly, and weekly goals.  Even if things get shuffled around it still makes a big difference in making things happen.  Blocking off my calendar with activities also made a big difference for me - if I don't get something done google makes it easy to just move it to the next available time.

Also love the podcasts - I tend to listen to them while working at a rental.  Recently I've been binging on them while painting my rehab; great motivation.

Welcome to BP! I second the advice for keyword alerts - they're a great way to keep on top of things in the forums.  I'd also recommend talking to some investor-friendly agents; it's their job to know the market.  RE groups are also great.  I'm involved with a few in St Louis, MO, and I find different groups have different foci and styles e.g. active list serves, opportunities to chat informally in weekly lunches, informative monthly speakers.  Meetup is a popular place; you just want to read the details about each group closely.

Welcome to BP! I think Bigger Pockets does a great job of showcasing the variety of ways you can invest in RE. I'm a buy and hold investor myself, but even when looking at myself and my buy and hold clients (I'm also an investor-friendly real estate agent in St Louis, MO) I find a variety of goals and methods.  So much of it seems to be about the setbacks we've had in life and how we deal with them.  Way to keep putting one foot in front of the other and not giving up on RE!  Let us know if there's anything we can do to help; BP forums are pretty friendly and there's lots of great advice.

@Fernando Zavala

There are positive and negatives to LLCs.  The forums have entire subsections on Insurance and Legal Questions; my advice would be to read through posts that apply to what you're considering then talk to an accountant, an attorney, and insurance agent (or three) to understand the different options.   It'd be difficult to make a recommendation because it depends on so many factors, including your investing style and what risks you want to take on.

I've heard commercial lenders say they prefer an LLC, but then they may also be considering your personal credit and debt to income ratios. If you're not QUITE ready to purchase, it may be helpful to contact some lenders and ask them what they prefer to see and why. There will be differences between the big banks and local, especially local banks or credit unions that may keep the loan in house. If you'd like I could send you contact information for a few lenders.

Welcome to BP! There's so much great information on here, and excellent networking opportunities on forums and off. 

So far the big change here has been timelines. Beforehand I was told that there was a documentation issue (state requirement to keep copies of closing documents) but I haven't heard of issues or complaints.

A lot of what I've seen here are in my questionnaire for investor-clients.  I will add that I also break down questions based on whether they are looking more at buy and hold or fix and flips e.g. asking if they plan to use a property manager isn't relevant if they're rehab and resale, nor is DOM in a neighborhood important for a buy and hold.  Even if they do both, different strategies are best discussed separately.

The questions are also about guiding the conversation - just like different people have different levels of risk aversion they have different definitions of risk.