All Forum Posts by: Stephen J Davis

In most cases yes. Seldom do you get a high enough rent to match the utilities. This will give you a lot of peace of mind as well. Thanks.

You can do all that without an LLC. I would not set one up for that purpose.

If this is new construction, that I not a good deal for rental in most cases. I would look for existing homes where you can pick up equity and cash flow. I will tell you that Conroe is a great place to invest. Many of my students are in that area.

I would ask your CPA about this not a forum. You are a business man now that you are buying your first rental property. Don't do you taxes alone. 

I don't know much about raw land but I would think that you reach out to 2 or 3 agents or brokers that specialize in land sales and get their advise. A developer would be a good person to talk to as well if you can find one.

I love the idea that you are moving up to apartments. Be sure to take the National Apartment Association classes on property management and ownership. Running apartments is nothing like running single-family or plexes. I have invested in over 4000 apartment units and the NAA classes are a great starting place.

This is wrong for a number of reasons.

1. $500,000 is way too high for a rental. They generally don't cash flow. $150,000 to $250,000 is the sweet spot where rents are highest per dollar spent.

2. No competent investor puts 20% down. You need to learn about hard money.

3. You forgot maintenance and vacancy.

4. You don't take out your personal taxes in a calculation like this as a rule.

5. It appears you are paying full price for the house. This is not investing, it is speculation.

You really need to take a course on real estate investing before you make a huge mistake. Education is the foundation of real estate investing.

I am not a CPA but that sounds a little risky. I would not claim it as a rental until you are out of the house and it is leasable. Get with your CPA to confirm.

On another note, when you refinance the house to pull out equity, go with a 30 year note to keep your positive cash flow as high as possible. There is a lot to this but you never pay off investment real estate. That is dead equity.

The first step is to build your buyers list. Join a local real estate investor club and start networking until you have 30 or 40 buyers. Then simply bring them the deals you find that fit their criteria.

Take a course on this stuff so you don't make other mistakes like this. This is so basic but could have killed the deal.