All Forum Posts by: Marisa Voelkel

Hi @George Willey, no I haven't had any issues. I have seen recommendations to only keep a few in one LLC so that is my plan, likely no more than 10. I have three. The goal was 10 by the end of the year. I might have 6, but I keep plugging along!

Thanks everyone for the confirmation.  @Jake Baker, believe it or not, my accountant said to only make 1 to hold the three properties we have.  He likes to keep accounting simple. 

Turns out, my title guy and banker can make this all happen fairly inexpensively.  I greatly appreciate good relationships when things like this happen!  

Just recently I had a notice from our insurance carrier underwriting that they were canceling or insurance for our rental properties. They apparently have strict rules about what the owner company can be involved with. Currently, we have one LLC that is engaged in several real estate aspects: BRRRRs, Flips, rentals, my agent commissions go through it, and contracts for general contracting. After speaking with our banker, a title company, my accountant, legal, and others, it was determined that the insurance companies are not fond of rental owning companies doing more than just owning and managing rental properties due to liability risks. So, we are opening another LLC specifically for owning and managing rentals. That means I have to move my properties from one LLC to another, open a separate bank account, change bank accounts for rental income and expenses, etc. My understanding is this significantly limits liability if were were to be sued by a tenant (could only go after rental company, not everything else we do).

Now, I believe the right legal CYA move is to have one LLC for each individual property, but personally, I don't want to keep up with the bookkeeping on that! So, we are segregating off our rental endeavors to a single LLC to protect our other operations. Redoing the titles and warranty deeds for our properties is costing us money I could have avoided if I had known better. Thought I would share in case others can learn from this. There is SO MUCH advise that is thrown at us when we first get into real estate investing, it's hard to filter through it. And I realize this is not a new topic... but sometimes hearing it a different way helps.

My advise to those planning on having more than one business venture in real estate is to set up a separate LLC from everything else just for rentals. It will help keep insurance down and limit the risk to the other operations. Just my 2 cents. Always open to other suggestions.

UPDATE!

Appraisal done. ARV is $200,000. Hard money payoff is around $63K and we put about $80K (with holding costs) into it. We decided to hold for a couple of reasons. 1) The CoC ROI is 17.27%. We rented it without marketing and will get $525/mo +CF. Refi puts about $17K in our pockets now but literally EVERYTHING is new so it shouldn't need much except the occasional repairs here and there. 2) The property sits on a double lot. The back half has street access to another road. Spoke to the city and they are excited to see us build a new SFH there/willing to help it happen. So we already own the property... just need to build a house.

Thanks for all the advice!  We are very pleased with how it all turned out.  

Looking for some advice. I have a property that we originally bought to flip in Southern WI (close to IL border). The ARV is roughly 180K+. Investment is budgeted for roughly 120K. 1) If we flipped, likely will get 50K in our pockets after closing costs. 2) If we hold, according to the BRRRR calculator, the CoC ROI is 16.8%/Inf%. After the refi of 125K, there would still be about 20K in equity to tap, plus about a $650/mo +CF. 3) Another option is to hold, refi at max equity, which drops +CF to about $250/mo, but puts more liquid cash in the bank.

Note: I am the GC and the Realtor so fees are already reduced.  House will be ready in March for any of the options.  We have flipped several houses already and own one rental at this time. 

Which would you do and why?  Is there an advantage to maxing out the refi and pulling as opposed to leaving the equity in and tapping it over and over?  With the numbers, all options are good options, just looking for feedback on why you might choose one over the other.  Thanks!

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $90,000
Cash invested: $12,000

In the process of updating a SFH as a rental property.

Investment Info:

Single-family residence fix & flip investment.

Purchase price: $220,000
Cash invested: $45,000
Sale price: $349,900

Beautiful turn of the century home made new! Fully renovated home ready for new owner.

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

We love the beautiful woodwork and style of old homes. This house was in a great neighborhood and we enjoyed breathing new life into it.

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

We found it through a local wholesaler.

How did you finance this deal?

Conventional loan and construction loan.

How did you add value to the deal?

The floors were maple hardwood throughout, so they were refinished. Tore out the old kitchen and bath and put in modern amenities and touches while maintaining the older home charm. New windows, new deck, fresh paint, new light fixtures and many more little touches brought this home back to life.

Investment Info:

Single-family residence fix & flip investment in Wisconsin.

Purchase price: $129,000
Cash invested: $28,000
Sale price: $187,900

Old home with no updates, did a full cosmetic overhaul (new flooring, paint, fixtures), updated plumbing and electrical, completely new kitchen.

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

It was a small, well maintained home with the same family for 60 years. It needed a lot of TLC but we could see something beautiful! We envisioned a starter home, and that is exactly who bought it. It made a wonderful first home.

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

We worked with a good friend who was our realtor. She did an excellent job in listening to our needs and criteria, then found this house. Unfortunately, she moved out of state so I decided to become a realtor myself so I could help ourselves and other investors.

How did you finance this deal?

HELOC with our mortgage lender.

What was the outcome?

Although we didn't make as much as we originally figured because we ran into some plumbing and electrical issues (60 year old issues) that had to be fixed, this was a successful flip. Our lender was very pleased as well so more deals are in the works.

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

I did, but she is no longer available for WI. I taught her the criteria needed for investing. Now I am a Realtor and ready to help other investors in this area because I get it. I recommend me :). Marisa Voelkel, Realtor, Madison Realty Group.