All Forum Posts by: Shawn H.

When filing taxes with multiple LLC's, I am assuming each entity requires a return. Does each LLC require a FEIN or can it be filed under the owner's SS# ?

Are rental properties which are connected to septic or aeration systems worth the trouble? I have a duplex with an aeration system and it is quite problematic. How do I deal with septic problems caused by the tenants? Or is this seen as just another expense which should be covered by the 50% rule?

I'm looking for information on Series LLC's, or maybe clarification. The way I understand it, a regular LLC in Illinois: $500 setup Articles of Organization, $250 annual fee, all properties within LLC are vulnerable to the others.
Series LLC: $750 setup Articles of Organization + $50 for each additional series, $250 annual fee, only properties within each series are vulnerable to one another. The application says the Series name must contain the entire LLC name and be distinguishable from the other names in the series. (ABC Rentals 1, ABC Rentals 2...??). Am I understanding correctly?

Thanks for the responses, I appreciate your experience and advice given.

The 50% rule applies to multiple properties over an extended period of time. When starting out, with only a couple properties, is there a certain amount, per unit, suggested to keep in reserves? Also, when considering new purchases, would you build up reserves to account for the new purchase? Ex. if you have 3 units and like to have $2000/unit, would you wait until you have $8000 before purchasing the fourth. Almost seems more risky until you have substantial monthly cash flow from many properties.

I would suggest that you include a clause, in your lease, that tenants are responsible for clogged pipes. Obviously, if you have issues with the main line, such as roots it should be taken care of by the owner. But having this in the lease may prevent tenants from dumping food/grease in the kitchen sink or unwanted items (toys, etc) from the toilet.

I'm considering a house with piers for a foundation rather than a crawl space. Does any one have any experience or knowledge about this type of foundation? Any common problems? I haven't seen the foundation yet, I am assuming the piers are similar to the mid span piers of a crawl space, but there isn't a perimeter wall. The home is a typical ranch 2bd 800 sf, built in 1912. Thanks

You can find the same products the 'Professional's' use on several do it yourself type websites for a fraction of the cost. In the state, in which I live, a pest control license is not necessary for your own rentals, unless you charge for the service. The Pest control websites also have a lot of knowledge of how to deal with different pests. NC Mark is correct about the cleanliness of the property.
I think most pest problems can be resolved with a little research.
Also, some Pest Control contractors may not have your best interest in mind. It seems like they want an on going service agreement, and not necessarily eradicate the problem. For the cost of one months service for one property, I can do it myself for 4 units for probably 2 years. With better results.

I know this is a personal requirement, but I would like to see minimum cash flow requirements for many of you when analyzing with the 50% rule. I agree that $100/door is a good number to strive for, but I would like to see what others use higher/lower.

I'm also curious of ACTUAL average cash flow received after deals are complete.

One more question: Are most financing with no down payment and 80% or less LTV?
Thanks

You can include in your lease/agreement: Tenant agrees to pay 50%, 20% etc. of the total water bill.
Another, more fair option, which will decrease water usage: install sub-meters for each unit, tenant reads and includes water payment with rent payment. Sub-meters are available(Daniel Jerman Co.) for about $50 each and hold tenant accountable for actual water usage and not a percentage. The water company does not have to be involved but you may need a water meter shut off key-Ace Hardware ~$7.