All Forum Posts by: Todd Willhoite

I think Warren Buffett said "When a person with money meets a person with experience, the one with experience ends up with the money and the one with money leaves with experience."  By announcing your lack of experience and large expectation you may have painted a target on yourself.  As many have said in this forum, get experience.  Starting here at BiggerPockets is a great way to get experience.  Asking questions in the forums as you did is a great way to learn.  Read books and learn before you do anything.  Be wary before trusting your money to others.

@Nick Belsky  Thank you for checking on it.

I read where loans for a vacation home 30 year fixed fannie mae loan only requires 10% down.  I talked to a bank in Branson, MO where I am considering building a vacation home and they said 20% minimum on vacation homes now.  Does anyone know if 10% down, 30 year fixed rates loans for vacation homes are still available?

@Doug Spence Still using Oklahomes and I am pleased.

I like cozy.co, just received emails that they are changing to apartments.com this week so don't know if that will change anything.

Thank you @Eamonn McElroy

College student has a 529 plan. The college they are attending estimates room and meals to cost $5,700 a semester. If the college student buys a house to live in while attending college, can they withdraw $5,700 a semester to use to pay on the mortgage payments for the house and be in compliance with Qualified Expenses For A 529 Plan?

This has been all said above, but let me state it differently which might be helpful. The brrr strategy goal is to have a rental property with around 100% financing that still pays the mortgage, taxes, insurance, maintenance, etc. (i.e. all expenses) and maybe has a little profit. With this strategy you will then be able to take the money you start with and go out and buy another property and repeat the process. In general you can't get to this goal by buying a retail property off the MLS because if you could, everyone would buy them (i.e. demand would be high, supply would not increase and prices would go up) Banks in general will finance around 80% of the fair market value of the property, so you need to pay 80% for a property worth 100%. The most common way to do this is to find a house in need of improvement, or a very motivated seller. Buy the house either cash or with hard money loan and fix it up so that your purchase price, repairs, and holding costs are at or below that 80% value and then go to a conventional lender (i.e. bank) and get a loan on the house for 80% of the full value, then you can pay yourself or the hard money lender back and you have little to none of your own money in the deal. Congratulations, now go do it again. The down side is finding the properties, risks of repairs being more than you anticipated, and generally when you have high leverage you have low cash flow. The upside is potentially owning a larger number of properties than you can the conventional way, and over time the mortgages gets paid down, the houses may appreciate, and the rents may go up, but your payment is fixed so after time your cash flow can increase.

David trying to decide whether to elect S-Corp status or leave as partnership for the LLC. If the LLC sells property initially then since some of the members are developers then won't the profits be taxed as active income and subject to self employment tax? Later if the LLC distributes the retained land to the members of the LLC they will get it without triggering a taxable event, correct? If elect S-Corp status then potentially the self employment tax could be lower based upon a reasonable salary and rest as distribution. If elect S-Corp and later distribute the retained land in the LLC out to the members of the LLC won't that be treated as a sale and trigger tax? Am I missing any angles here that might make electing S-Corp better?

Some partners and I are purchasing a large parcel of land.  We will probably sell off some large parcels to pay down the debt on the remaining property and then hold some of the land indefinitely.  Trying to figure out the best tax status for holding the property.  Some of the partners develop land for a living, I don't.  Should the llc buying the land be taxed as a partnership or s-corp?  Thinking about self employment tax ramifications and distribution ramifications.  On the long term hold, I can see the individuals wanting to have the property distributed to them individually.  If have a S-corp then it will probably be treated as a sale when the property is distributed.  If it is a partnership then the distribution would not be a taxable event.  Am I thinking correct?  Anyone have recommendations?