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All Forum Posts by: Marc Rose

Marc Rose has started 1 posts and replied 26 times.

You've done really well, so congrats on your success.  

My advice is that you work through some of the issues that you have been struggling with rather than ignoring them and moving (in this case physically) to a different place.  I'd be worried that it sounds like a form of escape.  I don't blame you for it - most in your situation would probably do it.  I don't see any issue with you moving generally, but I just would want to make sure that you're doing it for the right reasons, not to escape.

Beyond that, you've put yourself in a great position financially to have a lot of options.  You could sell in WA and buy in the new city, you could keep the old in WA and be a long-distance landlord (challenging but doable with the right protections involved), you could stay where you are and continue until you are in an even better position financially.  None of those would be bad moves.  

With respect to the cash, you've got to invest that (at least everything over your cash emergency fund - like 6 months of expenses or whatever you're comfortable with).  Put it in VTI or VOO or another low-cost, well diversified index fund (I prefer ETFs to mutual funds) at a minimum, which has historically averaged a 10-12% annual return (which is nothing to sneeze at - especially over a long period of time).  If you want to put a portion of it in single stocks, be smart about it and put a small percentage of your investments in a few stocks (spread it out in other words) - like no more than 20-25% in single stocks (with no more than [5%] in any one stock) and the rest in VTI/VOO.

Best of luck, and again, congrats for putting yourself in a great financial position.
  
  

Post: Legal Structure: LLC or C Corp

Marc RosePosted
  • Dallas, TX
  • Posts 26
  • Votes 18

@Sandra Shpilberg

C Corp = double taxation (corporate level tax and taxes on dividends)

LLC = pass through taxation (no corporate level tax)

So most pick an LLC as between the two

@Chris McKenna

Totally up to you on how you handle, but I feel your pain. I am a huge Dave Ramsey fan, and I plan to pay off my home first before doing any leveraged RE investing - I feel like that will give me a great foundation, and able to absorb additional risk. That will take us about 2 more years, so I can be patient. I have a good income, and want to have access to all of it free of debt payments before I invest in rental RE. I am planning on taking other precautions to address the additional leverage risk (reserves, insurance, etc) when I do get going. I know others would disagree with me - but I don’t care about that. I’m going to do it the way I want to. As you should as well. Best of luck.

Post: Buying properties with cash, selling them owner finance

Marc RosePosted
  • Dallas, TX
  • Posts 26
  • Votes 18

@Gil Ganz

Banks seem to be fine with this strategy. You are basically making a low risk secured loan at a decent interest rate. Not a bad idea, just different than most.

Post: Who Stole My Pension?

Marc RosePosted
  • Dallas, TX
  • Posts 26
  • Votes 18

@Jonathan R.

Sounds to me like he's doing fine as is. I'd make sure his 401(k)/IRA investments are in diversified mutual funds/index funds and not individual stocks, but a mix of RE investment income and 401(k)/IRA investments is a recipe for a strong retirement (assuming he has a decent amount saved up)

Post: Avoid capital gains/reinvest?

Marc RosePosted
  • Dallas, TX
  • Posts 26
  • Votes 18

@Eric Phillips

Why not roll all of your equity into the new house, have no house payment, and invest what would have been your house payment each month? In a few years you will be in a great position

Originally posted by @Kyle Altenau:

Some commercial lenders will allow you to to close without a personal guarantee. Typically they will be for larger transactions. They'll mainly underwrite the asset and it's cash flow. Aside from higher interest rate you may also find lower amortization. 

They will mainly underwrite the asset, but will also want to look at your personal financials as well. Even though, they're not taking a personal guarantee they'll still want to see strong personal financials. 


Thanks Kyle.  Much appreciated

How successful have folks been borrowing in LLCs without personally guaranteeing the loans?
For those who have done this, do lenders rely on financial statements of the LLC to get comfortable with not requiring a personal guarantee?
Are interest rates higher?
Mainly interested in conventional loans.

Thanks. 

@Wayne Brooks is correct. Just change the name

So I’ve counted 15 people in this thread out of the 128 replies who have invested with debt for over 10 years.  Hardly scientific results, but interesting. My theory is that there are a lot of folks who have very strong opinions about this topic, but few who have the skins on the wall to back up their very strong positions. I don’t have the real estate investor skins in the wall yet, so I’ll be more measured in expressing my theories.