All Forum Posts by: Mark Smith

No no no, that's not why I'm buying it.  I'm buying it for the cash flow.  I was just hoping this could accomplish a secondary goal haha.

I know there is a lot that goes into appreciation; the price paid for the home compared to the condition it is in, improvements I can make, the type of area the property is in and the direction that area is going economically.  But I've heard that multifamily properties do not appreciate as well as single family.

I am in the process of purchasing my first property (woo!), which is a two family in a nice town that has a detached two car garage.  I have been out of college for about two years, and ideally would love to refinance the property at some point and roll in my student loans.  I have about $65k in student debt, which seems like a lot of appreciation!  There are some things I can do to make the property nicer, but overall it is in good condition.

I know we can't talk specifics, I guess what I'm hoping for is that someone can say "Yes, this is possible!" or "No way, $65k in appreciation is hard to achieve."  So let's speak in generalities!

That is great advice everyone, thank you!  I'm definitely going to look into either requiring or highly recommending renter's insurance.  I think it is beneficial to both parties.  Thank you again for your input!

Is it recommended that I have something in the lease suggesting, or requiring, renters to obtain renter's insurance?

Thank you for your input everyone.  I will be approaching another lender today to see if they can offer any other options.

So here I am, getting all pumped because I'm looking at three properties (duplexes) this Sunday.  One out of the three really jumps out at me as the numbers work great.

My original plan:  5% down, rent out both units.  Parents are helping me out with the down payment as I don't have much cash saved, I will pay them back as rent dollars come in.

Problem:  I found out today from my potential mortgage lender that unless I plan to put 30% down, I must live in the property for a period of time.  I don't want to live there, I want it purely for investment purposes.  Are there other routes I can take to put less money down and not have to live there?

Thank you for your input Matt and Bryan, those are all very good thoughts.  Bryan, I really like your thoughts on non-verbal cues.  Bryan, how do you find the number of evictions?  Does this show up on the background check?

Thank you for your input!  I am using several sources to try to figure out the best plan for me.  Luckily, my mother is a paralegal so she has access to attorneys, I work for a public accounting firm so I can figure out the tax consequences, my realtor is an investor himself so I'm waiting on his thoughts, and then of course is the BiggerPockets community.  I'm thinking with all of those lines in the water I should be able to come to some sort of conclusion!

I am about to jump into my first deal, but I have been trying to learn as much as I can about asset protection.  I really don't want to get myself into any trouble, so I'd rather be safe than sorry.

I'm thinking about forming an LLC. From what I understand, the best thing to do is form an LLC for each property. I'm wondering what the tax consequences are of having an LLC. And what happens someday when I have 25 properties? That seems like it would be a really expensive tax season when it comes to paying to file returns.

I have also thought about an umbrella insurance policy, however the point was brought up to me that "if one of your tenants eats a chip of lead paint, a $1,000,000 policy may not go very far."  So now I'm not sure.

So the basic question is, what is the best, most cost effective form of asset protection?  I'm willing to pay a little more for good protection, but I don't want it to ruin the potential cash flow of the property.

Thank you!

What is the typical tenant screening process?  Of course getting a feel for the tenants when you show the unit, and background and credit checks, but how else do you decide whether or not you potentially have a quality tenant?

Thank you!