All Forum Posts by: Nick Schiltz

@Rick Pozos thank you Rick. I guess I used the wrong terminology. Since I funded the LLC the seed money for the property, is there any advantage to having an interest rate for the repayment of the loan? It's sort of like taking money from one pocket and putting it in the other. Would the income tax be different for the rent received as opposed to the loan repayment?

I lent my LLC the money to help purchase a multifamily property. I have 2 separate accountants telling me opposit things. In your experience which would you choose? One accountant says 0 interest, due on demand and the other says a fair market interest rate 4-5% for 30 year term.

Or perhaps you have a better idea. I am using the promissory note to help keep my personal assets separate from the LLC.

Thanks

If your buying multiple condos in a HOA, is the HAO insurance enough if you require tenants to get renters insurance too or what?

@John Mocker thank you John, this was helpful and I was able to find an agent that will be able to provide what you have recommended.

When purchasing a multifamily with an LLC, which insurance policies are recommended?

Would general liability, commercial property, and an umbrella policy suffice?

We are hiring a local property management company, does that affect the policies needed? Like perhaps remove our liability exposure?

Thanks! Stay classy BP

Looking at a multifamily family deal that is part of a larger condo association. The problem is there is a pending lawsuit and a large sum of delinquent condo fees.

Is this a red flag or perhaps a simple fix and good bargaining chip?

Thanks @Toni Mo, you are spot on about Worcester. My agent has a good network and has calls out to his colleagues but nothing in our ROI range that doesn't require significant remodeling or an obscure raise in rent that wont work for the location. The out of state investing goals actually came from podcast, not sure if I know the one you are referring to but I have listened to every BP podcast for the past 2 years. You also have a good point about the landlord laws. "Making the deal where you live" is also interesting for us here in MA. We may have a unique opportunity here for section 8 with so many low income earners, high rents, and a state that panders to those individuals.

@Justin Reader

Hello Justin, there are different factors to take into account and all ultimately depend on what your opinion is. CAP rates, ROI, and the location are often good indicators. (650x12)/ purchase price would give you the CAP. Say you bought it for $200k, 7800/200,000=.039 then it would be 3.9% which is sort of low but that also depends on the are you are in. The riskier the location, usually the higher rate. Plus rates are getting pushed down with all the high demand for multifamily. In big city high demand areas like Boston, 4% is pretty average.

The ROI is pretty much the same but divided by how much cash you put in the deal. If you only put down 10% (or $20k in our example) 7800/20,000=.39 then you would be getting a 39% return on your money which is terrific! Not going to get that with it just sitting in the bank. You would recoup your initial investment in 2.56 yrs (100%/39%).

There are more advantages such as loan pay down, appreciation of the property value, and depreciation for tax purposes help the overall deal as well.

Hey when it comes down to it are you happy with it or is it stressful and not worth your time? Your making money right?

Hope this helps and goodluck on future investments!

Wow thank you! I should have been active on here sooner. Such great positive replies within 24 hrs! (I have no idea how to tag other members. Not sure this will work) @Dan k. Other states interest me for a few reasons. Such as landlord laws, migration trends, taxes, and the bang for my buck. I have a duplex local which was purchased for about $95k per unit but there are many markets with much better price to rent ratios. I'm always open to good deals. Thanks again y'all for your points of view! Stay hungry

Hello, thanks for reading. Currently looking for multifamily properties in MA, but the numbers are looking better out of state. Have funding and can find properties in markets that interest me. 3 things holding me back are

1. Unsure of areas- Sure we can find great deals on paper, but what is "that neighborhood" like? Near me in Worcester, Ma the rents are easily $1200/mo in one spot and two streets over you would be lucky to get $900. Would agents or managers be better for this?

2. Should I just cold call property managers with good yelp reviews? haha I am not very experienced on BP. Is there a way to find property managers on here and filter down to the location I am looking for?

3. Sounds silly when I say it. I have a buyers agent working hard for me licensed here in MA, and it feels like a betrayal of trust or something if one day I'm just like "hey joe i dont currently need you to keep looking for properties, i just bought one with another agent down in TN." Is that crazy? I am all about trust, accountability, and being a stand up citizen. I feel like it would be immoral.

Thank you for any input. Be gentle, its my first post. HAHA