All Forum Posts by: Tom MacDonald

Hi, my partner and I are interested in forming an LLC. We plan to flip several SFRs in the south Houston area within the next six months, and use the profits to acquire a 16-30 unit apartment within the next 12 months.

We have two questions regarding this. Firstly, what would be the benefits of incorporating as an LLC or other business entity (i.e., what are the worst case scenarios if we don't?) Secondly, what is a ballpark estimate for how much it will cost to set ourselves up as a legitimate, well protected business entity?

Thanks for your time, BP community.  Any referrals to professional in the Houston area are appreciated!

Tom

Thanks everyone for the great advice and comments!

Darn, I'd really be interested in BRRRing a condo in Houston but I guess finding a good deal would be really hard! Perhaps I'll start focusing on SFR on the outer skirts of downtown.

Hi BP, I am new to REI but hope to make my first investment soon. I am analysing properties in the Houston area, and I can't seem to understand how make a deal on a condo come out when I factor in HOA fees and property taxes. Am I doing something wrong?

For example:

I figure this MLS listed 2/2 condo in Houston is in a really trendy neighbourhood, I know because my brother lives right around the corner. It's listed on the MLS for $194k. 2/2 condos near it sell for at least $50k more, and it looks like you can find an apartment or similar rental in that area for about $1,800/mo.

So the mortgage calculator is telling me that if I were able to buy this for $185k with 5% down ($9,250) at 4.75% with a 30YF, the monthly mortgage payment would be around $917/mo.

That sounds pretty good, but the HOA fees for this property are $350/mo, and according to the tax history section the property taxes in 2015 were $4,722 (up +47% from 2014?!) or $394/mo.

So the total monthly payments would be $1661!

Am I missing something here? Should inclusion in HOA somehow bring down my assumed expenses? Am I misunderstanding the tax situation?

Thanks in advance,
Tom

Good to know about the foundations in Texas, thanks for sharing!

Great story man, thanks for sharing!

Great post, thanks for sharing! 

Guys and Gals thanks for all your perspectives, I can already see that being part of this community is a great thing.

@Randall Jacobs Good perspective, thanks Randall

Good advice, thanks Steve