All Forum Posts by: Ryan Franklin

Thanks @Mark Lucido! Very informative post...and I am very familiar with the hassle of the accelerated business filing deadline - ahhh...the stresses of tax season!

@Andrew Cushman, outstanding answer...thank you for the post! Regarding a Series LLC...when you say it is basically a batch of LLCs that are treated as one big LLC, is this meant as far as taxes are concerned (meaning I can file taxes only once as the "big" LLC - thus saving me the headache and money of filing many individual returns)?

Also, I would very much like to connect with you, as I am currently attempting to structure a deal on a 72-unit apartment complex and would love to hear your input!

I am a looking for advice from seasoned/successful investors regarding what they would do if they were to start over in my current situation. I will try to include as much relevant information as I can.

I have $100k cash, two rental properties (one with $110k equity, one with $150k equity), a $135k/year job, and no debt (other than typical living expenses). Between cash, vehicles, equity in properties, and collectibles/jewelry, I have a net worth of ~$500k.

I know commercial lenders care about previous experience - I have been an owner/manager of my two rental properties for 5 years.

I have perfect payment history over the last ten years, save for a foreclosure on my record from 2012 (I'll spare you the boohoo story - ultimately it was my responsibility). 

My "middle" FICO score is hovering around 715-720.

My desire is to quit my job and pursue real estate investing full time.

Given the different RE investment avenues, which would you take in my position? Here are my options as I see them: 

1. BRRRing SFR sounds great, but it will take a significant amount of time to build up enough cash flow to replace my current income.
2. Flipping average priced ($200-250k ARV) homes sounds like the best way to achieve my current income, but will not contribute to overall wealth.
3. Mid-sized apartment complexes sounds like an interesting route to achieve both income and wealth, but it requires a significant chunk of my own (skin in the game) capital - leaving me with little capital to pursue options #1 or #2 on the side. Also, would it behoove me to keep my job for the time being to be able to claim the income.
4. A combination of #1, #2 and #3, (spitballing here) incorporate as a RE investment business where I flip 2 houses, use that income to purchase a BRRR , repeat a few times, then proceed to #3 where I can now claim the flipping proceeds as income when qualifying for a commercial loan. (To be clear, I really have no idea if my income is even a metric/requirement for a commercial loan - I would expect a lender would be more interested in the cash flow of the property).

Obviously there are a number of other approaches as well, so if you feel there is something completely different than those I laid out, I'm all ears! Also, if I am misunderstanding something, please feel free to correct me!

Also, I'm looking at 4 primary areas for investment: Phoenix, AZ; Las Vegas, NV; Fayetteville, NC; Tampa, FL (in case that affects the approach).

Hi @Mark Lucido! Thanks for your reply. This was my thinking as well; however, it seems it could become an expensive hassle when it comes tax time, no? Is there a way to structure/bundle the LLCs (maybe an umbrella company) such that it doesn't cost $xxx for each LLC when it comes to filing taxes?

Also, does this cause any other unforeseen issues - such as qualifying for mortgages?

Curious: How many properties do you typically hold under a single LLC? All of them? 5? Only 1??? What is your reasoning?

Hi @Logan Allec. I have ALWAYS hated the idea of working to make someone else rich...but, for most people that's reality...at least for a while. I have been working on side projects for a while hoping to 'hit it big' while basking in the comfort and safety of my well-paying job. Finally, I have come to realize it takes a bit of luck, not just dedication, to hit it big with something on the side (not giving it 100% focus). So, I have been researching back and forth between RE investing and franchising, and have finally decided RE will provide me the most freedom as well as a bigger challenge and higher ceiling (virtually none). 

Hi BP patrons!

My name is Ryan Franklin. I am kinda/somewhat/fairly new to the RE investing game. I have three buy-and-hold rental properties (soon to be 2 as I am selling one) that I have purchased over the last 9 years, but I have just recently chosen to pursue RE investing as a career. I have a great paying job right now (I am a software engineer making ~140k/year), so I want to acquire as much 'pro' knowledge before I let loose from my job and start building a wealth building business in RE! I have TONS of questions and really want to fully understand the minutia of the different types of investing, so please bare with me as I pick all your brains!

Thanks!

Ryan

@Patrick Philip Good for you, man! Don't let these people mess with your head. There's nothing wrong with asking the question...that's how you find out the answer! While you may not be in the position to do what you're aspiring to do with conventional methods, at least you're figuring out the ways you CAN'T do it, so that eventually you can find a way you CAN. I commend your courage and aspirations!