All Forum Posts by: Wade Sikkink

Sorry,

EIN cost $150 to file the request online. You get your number within a day.

http://www.irs.gov/Businesses/Small-Businesses-%26-Self-Employed/Apply-for-an-Employer-Identification-Number-%28EIN%29-Online

I suppose if you file via snail mail it could be free.

Excellent idea and a great way to get started.

Good luck!

Jared,

It seems no one really answered the question of costs to start up a biz. Here's the quick and dirty:

LLC formation: Around $250 or so depending on your state filing fees. If you only have a single member LLC then you can safely use online services like LegalZoom. If you have multiple members or anything else weird then use a local attorney and you'd be looking at $1000 or more.

EIN: $150. As a business you need to have a federal EIN. You can easily file for this online yourself.

Insurance: Don't need until you have a property, and then biz coverage can be included as part of this. Amount depends on where you are and what the property particulars are.

Website/domain: You don't have to have this to get started, but if you choose to they are also relatively inexpensive. Domains are as little as $12/yr.

As for your business plan, Steve L. summed it up pretty well. I've been involved in starting several businesses and have gone through the oh-so pleasant activity of raising venture capital. Realize that no one is going to read your business plan. Writing a biz plan is a good activity for you to fully think through what your plans are, but that's about where it ends. Don't expect it to be useful beyond that.

Good luck!

I agree with Shane. Find a turnkey duplex and live in one side. I wish I had done this 15 years ago when I got out of the Navy. Your rent payment is being thrown away now. I agree to keep the 401k going for the free match. If you are going to pay down debt, start with the credit cards. Don't hurry to pay down the low rate stuff. Since the duplex will be your primary residence, you can get a very low down payment conventional rate mortgage, then you are building equity vs. throwing away rent. In a couple years when everything has settled in and you are comfortable with the land lord game, find another duplex and move into that one and keep the original as a full rental. Rinse and repeat.

Good luck!

Marc,

Best of luck to you. I have a friend that got laid off about 6 years ago. He plowed into his side business with a vengeance (no other option) and now 6 years later he's his own boss and has 5 employees. His wife even quit her job to work in their business. Now that's success! It can happen to anyone.

Good luck and keep us posted.

I'd be up for that. It would be good to meet/network with others in this space in the area.

Jason,

This is exactly how we got into our first rental. We couldn't sell our house and were moving out of state. After 4 months on market, we found a renter that was on a temporary job assignment for 18 months. His rent basically covered the payment on the house, so we didn't get ahead on cash flow, but no money was out of our pocket to cover it either.

When he left the overall market had improved and we were able to sell the house. Overall it was a good experience for us, but like any rental situation, it heavily depends on the tenant. If you rent it for a while and your tenant trashes the place it may take some $$ to get it in sellable condition again. Good luck!

Nick,

I agree with Joe. Anything conventional is going to require at least 20% down and more like 25-30% if you don't have a relationship or track record.

Ethan,

Yep, I'm there quite a bit. Message me or send an email and let's connect.

wadesikkink@gmail.com

My first rental was my previous home that I couldn't sell when I took a different job out of state. We cut our teeth on land lording with just one tenant and learned a lot!

The first property we actually went out and bought was a 4 plex. I liked the idea of multiple tenants because a single vacancy doesn't result in you eating the whole mortgage.

If I had it to do over, 20 years ago, I would have bought a duplex and lived in one side and rented out the other. Once that one is established, move out and fully rent it and buy another duplex. Rinse and repeat. Loans for your primary residence are much easier to get with lower down payments.