All Forum Posts by: Todd Krzeminski

With peer-to-peer, I worry about another economic downturn. I believe Prosper nearly went out of business in 2008ish due to the amount of defaults. Since the loans aren't backed by anything, it's more risky than real estate backed notes.

Full disclosure -- I too, have money in Lending Club and Prosper, but I'm nervous about it.

@Chinmay J. I noticed you too are in Loudoun County. Where are you investing, if you don't mind me asking?

I like the question. I'm thinking of doing yellow letters and trying to figure out how to begin.

@Dan Call Probably Winchester/Stephens City to start. Picking a single market I can focus on, and then expand down the road.

@Osmar Costa Jr. I don't believe that's necessarily the case -- I think the regulations required for non-accredited investors are more onerous so most funds don't bother.

@Nehemias Ponce Only one note so far. It was a great experience -- I was lucky in that as soon as I purchased it (at about a 7k discount), the house went on the market and sold a few months later. So I captured the kicker within 5 months. I know that's very rare.

For my next note, I'd like a 1st, whether it's a full or partial. I don't like the idea of holding a 2nd if there's going to be a market correction, unless there's a lot of equity in the property.

Dan,

I'm in Round Hill. I'm in the same boat -- have a couple REI properties out of state, but want to start focusing locally. I also have a full time job. Unfortunately, I don't have the insight into those areas yet, but its a goal of mine to do that in the coming months. Perhaps we can discuss and compare notes as we go?

Todd

I'm in the process of setting up an LLC and my wife will likely be setting up an entity for a non-REI business shortly. I'm looking for book recommendations that explain how to manage the day-to-day requirements of operating the corporations. Things like, but not limited to, taking distributions, funding the corporation, corporate formalities and defining payroll -- details on the process and gotchas. Not looking for recommendations on setting up the corporation (e.g. Garrett Sutton's Start Your own Corporation), but rather operations of it. Any thoughts?

@Nehemias Ponce Do you have a source for buying Partials? I am also interested in partials -- I have a 2nd that is currently in payoff, so I'll have funds coming free that I want to invest. I'm not familiar with purchasing partials, but it seems like a good option while in the process of expanding your bankroll. Sounds like it would also be easier to diversify with partials.

If you use Legalzoom, be aware that you still need to perform other steps to keep your LLC in good standing. You need to file the Articles of Organization with the state, then create an Operating Agreement and get an EIN with the IRS. Then there are the recurring yearly requirements on top of that. Having an attorney to guide you and remind you might be worth the cost. The last thing you want is to be non-compliant and have the LLC pierced in a lawsuit.

I'm not a legal expert, but isn't it better to have an S-Corp for wholesaling? Otherwise you'll be paying Self Employment tax? Like @Dani U. mentioned, Garret Sutton's book is a great resource for all things Asset Protection.

 As I understand, Norada adds no premium on top of the price. They are acting as the selling Realtor so they get that 3% commission -- which is why you don't see a price difference.