All Forum Posts by: Ryan Stirling

I agree with the amount of equity in the property. That's what I meant to write, but I shot the reply out quicker and didn't word it properly.

As a follow-up question, if I do a LLC, does that automatically make my financing options limited? For instance, for my first property, I am trying to use owner occupied financing. Is that possible with an LLC?

A few months back, I was gung-ho about getting an LLC and buying my first property in it, but since then I have backed off the idea due to the limitations for 1st time buyers.

I understand the advantages of an LLC, but there are disadvantages to them as well especially when starting out.

It's very difficult to get financing with no assets or credit history in the newly formed LLC.

@nationwidepi,

Is it possible to do a DBA, so you can have your tenants pay your business name?

From what I've been told when I asked a similar question to RE investors, most investors go without an LLC for the first few properties (5-10), and then once you have a few, you could transfer them into an LLC or put all new properties in an LLC.

When I first starting learning and reading about REI, all the books/gurus said to put 1 property in 1 LLC and when I talk to real investors, they suggest determining a set number of properties or property worth and then once that LLC is full, open another one.

@John

Did you count the work you do as an expense when calculating your taxable income?

Tim,

This is not investing. When I first started considering getting into REI, I thought about doing a condo deal with my uncle as a partner. The properties we were looking at would either net cashflow nothing or negative cashflow. As I learned more about REI, I learned that this isn't an investment. You need to be making money not losing it. For that situation, what happens if you have a major expense come up or you can't find a tenant, now you're paying a huge mortgage payment. This is not a good idea.

K W,
Thanks for your response. I do understand there are a lot of ways to do this, but I was looking more for what individuals on this site "actually" do to learn if they think it's a great method or what the pros/cons of it. What do they use for their labor rates, etc.?

I'm interested to learn how people on these forums handle property management, labor, and any other expenses that you perform yourself.

Do you assign a value to your time and if so, is it market rate or do you use a discounted rate to increase the property's cashflow?

Do you pay yourself a salary/income or do you keep the money in the investment (in the bank account of the entity)?

Norma,

Do you live in the place where your tenants live? This is just my opinion and it's based on what people have told me because I have never done it. I think there's a certain tight-rope you walk when you live at the place you landlord. I could be wrong. Can you please further explain your situation?

Also, thank you for your thoughts because I'm constantly trying to learn more about landlording with hopes of pulling the trigger this year.

@Eric,

The idea was that our partnership would own the property and the partner living in the property would be a silent partner. Basically, the main reason to be doing this is to get OO financing as opposed to an NOO financing/investor loan. All maintenance would be done by the other partner (not living there) or a property manager. It's kind of a situation of having your cake and eating it too and I wasn't sure whether it was possible or not.

You bring a good point that you have to disclose the information if the tenant does ask you about it.

What kind of loan did you get? and can you explain the process of how you showed them the rental income (Did you have inherited tenants that you could show an actual rental stream or did you have to show the bank what you would be charging for rent?)

I have been talking with a possible partner and we were talking about the idea of owning a duplex and living in one unit while we rent out the other. We figured with this setup, you could be eligible for OO financing and lower down payment and better terms. As far as I know this is something that you can do, but please share your thoughts or opinions on this.

The one thing we didn't like was the idea that the tenant would know who owned the house. We have no problem finding a good property manager, but we didn't want to create a situation where the tenant knew we owned the place and lived right upstairs. We were thinking of work arounds for this. One idea was doing a partnership with a legal name and then that name would be on all the documents and the tenant wouldn't know who the owner was. Is this correct?

Also, I know someone on here actually does this (I think his name is Tim), but I couldn't find him when I searched through old threads. Can anyone who has done or is currently doing a duplex where they live in 1 unit and rent out the other, I would love to talk to you. Thanks.

Frank,

Thanks for your response. Right now, I do have over a 700 score (not sure which bureau off the top of my head).

I have 2 credit cards. I also have a work credit card (but I heard that doesn't count, can you shed some light). That being said, I should go out and get another card. Are there any suggestions?

Also, I wanted to know if I could guarantee a certain interest rate and credit limit before I agree with the credit card company. I just don't want to submit an app and hope for the best is.

I called up about a month and a half ago and asked for a lower rate on 1 of my cards which is 15+%) and the person I talked to said there was nothing available lower at the time. The person was very nice and congenial and answered all of my questions. I really felt he did everything in his power to help me out. I didn't reference my credit score. Is that something I should do?