All Forum Posts by: Matt Browning

Getting an LLC can take 30 minutes. I would go ahead and set one up. Don't stress out on picking the prefect name, you can always do a DBA to use. You can even have multiple DBAs.

Don't worry about the 2nd LLC until you need to do that. Again, takes 30 minutes. If you own the business and the land, I would keep them together. If you go to sell the business, but want to keep the land and lease it to the business, I would then separate them at that time. 

Getting the loan in your LLC doesn't change your borrowability. They still look at you and anyone else applying for the loan. Your name is on everything. 

You can certainly own multiple assets in the same LLC, but I would be careful about operating a business and owning other real estate or investments in that LLC. A law suit from a tenant can put your other assets in risk if they are inside that LLC. 

That is a very interesting concept. I would assume that the lease should include some kind of turnover maintenance provided (pr subsidized) by Nomad. Certainly a new traveling tenant would like to come into a freshly deep cleaned property - which would be a new, additional expense that wouldn't otherwise exist. The landlord would either need to build in that cost into the lease based on the number of expected turns, or possibly better for everyone, have a flat rate fee predetermined for deep clean, paint if necessary, carpet cleaning or other minor repairs.

The way I understand it is that as long as you're residing in the primary residence, there isn't anything preventing you from also collecting rents. So you could rent out bedrooms or any ADUs on the property if they're properly permitted. Also, you can get an FHA loan on up to a 4 unit property, so duplexes, triplexes and quads will qualify for FHA. But you do have to live in the property for which you got an FHA loan. Only for 1 year though, I believe. Double check me on that length of time. When that period is up, you can move out and even get another FHA loan on a 2nd property and rent the one you just left.

I think it may be beneficial if you clarify what kind of strategy you're looking at. You might get responses more applicable to what you're trying to hear about. SFH, MFH, Flips, BRRRR, Subto, Foreclosures, etc.

For me personally, I kept forgetting about exterior property maintenance. Lawncare and landscaping, pest control, septic cleanout, etc.

It sounds like we just need to start a networking event around the corner for us that didn't make it in time!

Quote from @David Cunha:

Hey Matt I'm currently shopping around for a HELOC and started talking to my bank ICCU. Even with a great credit score(800+) and no unsecured debit I received a rate of 5.5. I was wondering what credit union did you go to for your better rate?

Mine was University of Kentucky Federal Credit Union. They only service the Lexington KY area. You may try Members Heritage CU.

You may have some luck finding commercial lenders offering products that are only 15% down. I had a local bank offering me that with 5.25% ARM after 5 years with 20 year amortization. It's a way to get into a deal with less cash.

Sorry I missed it, but looking forward to the next one

I was given better rates from local credit unions than the three banks that I approached. On my primary residence, banks were around 85% LTV with a rate of prime - 0.5%. So at the time (two weeks ago) it was 4.25%. Fees were around $350-500. Credit Unions came back willing to go 100% LTV and prime - 1% (3.75% at the time). Also, one of them was willing to waive all of the fees if the HELOC stayed open 3 years. I went with that one!!

I'm using the Rental Property tool on BP, but I have a question on CoC return. I have around $15k in cash, and $305k available in my HELOC. When using the tool I put the HELOC funds in the downpayment, so the report assumes that the downpayment I'm making is cash. So when I see final cash flow, I have to subtract the debt service payment going to the HELOC. That's fine, but my deal only has around a 9% CoC return even before I'm paying for my HELOC debt service.

I guess my question when evaluating this deal, I'm probably only going to put $10k in cash in the deal and the rest will come from my HELOC. I'm assuming that I should still use the 9% as my CoC... but since I'm technically borrowing the HELOC funds my actual CoC would be exponentially higher since I only have $10k in actual cash in the deal. I'm looking at a commercial loan at a rate of 5.25% (5 year ARM), amortized over 25 years, and a floating HELOC rate of Prime - 1% (so still 3.75% at the moment). It's hard to see a clear picture since I have two sources of borrowing and they're at different rates.

Thoughts?