All Forum Posts by: Mitch Kline

 Sean,

Appreciate the information and recommendation. 

Currently I have a seperate accounts for all things RE related to help ease the burden come tax time.

With this being my first property we went the more straight forward route, I own and manage the property in my personal name and am utilizing an umbrella insurance policy. I intend to transfer property ownership over to an LLC once I create one (likely on my next RE purchase)

Chris, I appreciate the reply. The intent of the LLC would be first and foremost to be able to sign a long term lease (to show secured income) to so that I can clear my debt related to the mortgage so that I can buy subsequent properties without waiting two years to show my short term rental income to lower my DTI so that I can qualify for additional loans.

Let me know if I am missing something here or if there is additional (better) ways that I could clear that debt off my DTI.

Thanks for your time.

Hi Everyone,

Looking for some advice on business structuring as I am currently under contract for my first investment property.

Situation: My brother and I have decided to partner up and tackle real estate investing together. We both have high credit scores and low DTI. We intend to buy houses in our personal names and go back and forth with who is on the mortgage so that we can each scale to 10 properties and own 20 properties between the two of us. Our current property is under contract and I am buying it under my name with a conventional loan and we intend to short term rent it and my wife is going to manage it (she currently manages STRs for a Co-hosting business).

One of the lenders we talked to who is also an investor recommended that we start an LLC and rent the property to the LLC so that we can erase the DTI since we wouldn't be able to do that if we short term rent it. I like this option, but want to get opinions on the best way to structure this.

Question: Do we start an LLC 50/50 ownership as property management company with me and my brother and then sign a year long lease from me personally to the business for PITI so that it removes it from my DTI? We intend to pay my wife 20% of income for the property management, would it be best to make her an employee of the LLC and pay her commission? Or have her act as a contractor to the LLC? Additionally, if we go the LLC route would it be better to run all of the income and expenses through the LLC? Or should I run all income and expenses through my personal accounts? How would insurance work? Would I have to get STR insurance as the owner (personally) and STR insurance as the business?

Goal: Grow our portfolio and reduce our DTI by showing income from these investments. Find the best way to reduce the amount of taxes we get stuck with. Employee my wife so that eventually she is making enough in her own name so that we can add another 10 houses down the road under her name.

Thanks in advance!

@Shawn Good How are things going with your STR in Fox Lake? I am looking to invest there as well and I am curious to see what you have learned over the last year. Hope it has been going well for you.

@Omni Casey Wish I would have been able to make it to the last meetup, but unfortunately wasn't able to. Do you have a date picked out for the next one?

Hi @Kathyayan goud Mula and @Royce Anies,

My wife is from the Indianapolis area and we currently live in Hawaii and are looking to purchase an STR back in Indianapolis area to utilize when we visit family. I would love to connect with either/both of you to bounce ideas off of each other or share research. My wife is very well versed in some of the different areas/neighborhoods considering she grew up there her whole life. My father in law is also an investor (LTRs) in the area so he has many connections as well.