All Forum Posts by: Tanner Lewis

If you are locked in at a three-handle, I would HELOC the equity and use it as a down payment on a new deal. If you have not already used it, you can do an FHA loan with 3.5% down and buy up to 4 units. You must house hack for a year before entering a new primary residence.

From what I have seen on the lending side, a lot of people are doing flips and STRs in that market. LTR cash flow is just hard to justify unless you have a killer deal. 

Listen to the BiggerPockets podcast. I tossed it in my headphones at 2x speed while I made breakfast and was able to listen to four years' worth of podcasts in six months (during COVID). The podcast is a great way to learn new investing concepts and think like an investor. 

A lot of West Virginia will be considered "rural" on an appraisal, meaning your max LTV will likely be cut. For example, the max LTV on most DSCR loans is 80%, but if you are rural, you will likely be cut to 70% LTV or less (if the lender can do rural). Make sure you work with a lender before looking for a deal to ensure your buy box will get you a property eligible for financing.

I see some pretty profitable deals there, and there are a fair amount of profitable STRs in the Snowshoe and Canaan Valley area. 

When people talk "doors" in their portfolio, it is more of a credibility metric than anything. Typically, it just refers to the number of units/leases you have, not the number of tax parcels. 

I agree. In my opinion, many of these higher cash flow, lower valuation markets make a lot more sense as all-cash investments. That way, you can also pull on the funds in the future if needed. If you are in a more appreciation-focused market, or prices are $200+ for an SFR, then it starts to make more sense to leverage on these properties.

Regarding taxes, I believe LLCs are pass-through entities, and you will just claim the income on your personal tax returns. I would reach out to a CPA to confirm this. 

For lending, yes, you will be limited when it comes to conventional lending, as those loan products are made for owner-occupied properties. However, DSCR loans have just become a thing in the last three years. They allow you to take out a loan in an LLC and qualify based on the property's income rather than the DTI (debt-to-income ratio). DSCR loans are essentially investor-friendly versions of conventional loans.

For entity structuring for asset protection, I see most borrowers have the following structure: a Wyoming LLC owning an LLC in the state of the property. So if Texas: Wyoming LLC owns a Texas LLC. This gives you the anonymity and tax benefits of a Wyoming LLC, and the asset protections of a same-state LLC. This is how I am structuring my entities with my partner at the moment.

You could do a hard money cash-out refinance to pay for the rehab or just a standard DSCR cash-out. I know most lenders have 6-month seasoning requirements, but there are a few that can do cash outs at 3 months and even fewer that can do it instantly.

That makes sense. I suggest looking for more turnkey properties if that is your priority

The south is a pretty hot market, but it really depends on what your goals and strategy are. I'm seeing a lot of BRRRRs and AirBnBRRRs in FL. But the questions I would ask yourself before finding a market are: am I looking to prioritize cash flow, appreciation, or a mix of the two? What strategy am I looking to do: flip, BRRRR, LTR, STR, small multifamily, etc? Once you figure out the answers to these two questions, you can start to narrow down what markets make sense for you based on the FRED economic data: https://fred.stlouisfed.org/