All Forum Posts by: Mike V.

Check out this sticky post:
http://www.biggerpockets.com/forums/109/topics/46810-real-estate-corporation-llc-structure-faq

Lots of great info and a lot of opinions - I'll sum it up - talk to your CPA/attorney to decide whats best for you.

I have rehabbed/flipped 4 properties and have 4 rentals and am now just setting up a business structure. Keep in mind unless you are paying cash you most likely won't be able to buy in an LLC since banks typically will not lend to an LLC for rei.
I am setting up the business structure to limit liability between individual properties and myself.

Ali - Congrats!!!
I know what you mean, we had our third child on June 18 and although a little sleep deprived my motivation for success is once again pushed up another notch.

John,
Very good deal, and congrats on getting a bank to do a HELOC on an investment property - I thougth those days were long gone. I assume it is a local bank.

I would look over your credit report very closely - your score dropping 80 points just for maxing out a HELOC doesn't sound right. I max out my 100K HELOC on occasion and have never seen my score fluctuate more than 20 points.

1 for me, but I am currently reading up on trusts so I may be a 2 shortly.

Brian,
Have you started pricing out typical jobs with all this in mind? If replacing a single window was $300 is it now $400? Painting a room $200 now $350 (if sanding required). Just curious if you have any idea what this will cost. My typical rehab is 60-80 years old usually includes doing every type of work that this law now covers.

Rich,
I'm still using my own money and a local banks money. I checked into several HML in my area and they all wanted me to be eligible for a refi option to the secondary market and since I have 4+ mortgages I was denied. I have a 780+ credit score, a well paying day job and over 50K of real estate income shown on last years tax return and I can't get a HML - pretty bad.
Mike

In my area only the guys with deep pockets play the trustee sale game. Its all about risk/reward, the risk is much higher but so to can be the reward. We had a local investor who did alot of trustee sales speak at a REI club meeting. He wasn't selling anything just giving insight into his world. He gave 4 different extreme examples of profit/loss. His largest profit was over 200K but he had a couple of ~80K losses. In this stage of my life I can't afford to lose 80K so I will stick with REOs/HUDs where I have been averaging 20% of ARV in net profit with relatively low risk (I get to inspect the property, I get clean title, and I only buy if renting it out makes a decent 2nd exit strategy).

My local bank wants the contract and a spreadsheet breaking out the rough estimates on repairs. They then give that spreadsheat to an appraiser and request an appraisal based on the value after all the work in the spreadsheet is done. The loan me 80% of the purchase price and 100% of the rehab money if the appraisal justifies it.