All Forum Posts by: Sean Morrison

Hi @Nick Brown,

I'll take a stab at this by breaking down the questions. Of course, I'm not providing legal advice, just information. 

First, there's a lot of info on the forums about whether you need the LLC for protection with early purchases. More important right now is insurance. A private loan is an option if your family is willing to lend to an LLC.

If you're doing this seriously, don't just file on LegalZoom; have an attorney with real estate LLC experience do it. Filing with the state is easy, but that's not what you pay for. You're paying for the detailed operating agreement, the correct structuring, and other things that actually provide you protection.

Talk to your attorney before just accepting checks for financing. You're treading into securities laws, which can be complex and highly punitive if done wrong.

Finally, you could get financing, but they'll want collateral. You're new so odds are they'll require a personal guarantee for financing, so $500k may be tough without some family co-signing that loan.

I'd love to hear others' takes on this as well.

--Sean

Thanks so much for everyone's help!

Fortunately, there's no HOA fee. I did assume management costs of about 8-10%. That cuts the cashflow to about $80-100.

I would be financing. A good chunk of that insurance is flood (AE zone), and PMI which may not be necessary depending on the down payment. Vacancy is 10% of rent, plus I added a bit more for turnover costs like cleaning and staging. It seems like it should cashflow ~$200 p/mo if I offered $80k. I know I'm missing something...

Hi, I'm reviewing a house in my neighborhood and wanted to see what people thought about what I should offer. It's a 3/1 SFH in Slidell, LA. I figure about $15k for repairs/updates and it would rent for between 1100-1300 (1200 for below analysis). As for expenses, this is what I think they'll be:

• Various insurance - $260
• Taxes - $135
• CapEx (8%) - 120
• Maintenance - 75
• Vacancy and Turnover - 150

They're asking $100k, but I think that's high. What should I offer? The 70% rule seems to rule out any actual deal.

Also, is it worth sticking in a second bathroom?

GeauxBiz makes filing for the LLC easy. Of course, if you want it to actually protect your investments, you'll absolutely want to talk to your lawyer. Things like operating agreements, dealing with ownership in a mortgage, and even how you sign your name are the kinds of things that make or break an LLC in the courts.

Hi Sandy, and welcome. I'm in the NOLA/North Shore area, but have been wondering about BR as well. I'm not sure how things are affected by the recent flooding.

Welcome from Slidell. Let me know what you find.

Some friends of mine are currently doing the exact same thing in a gentrifying neighborhood in New Orleans. What they're finding is that (1) gentrification takes a long time, especially when you're living there; and (2) it's much harder and more expensive to do their needed repairs. This is primarily because decent contractors won't go to their house without a higher quote. We were there once and couldn't even get a taxi to show up. Make sure that danger premium is part of your analysis.

Thanks for the warm welcome everyone. @Ryan Monier, I'd love to pick your brain some time about this area. I was living in NOLA, and while not investing, I at least understood the dynamic. North Shore is very new to me and still trying to figure out which areas are worth while.