All Forum Posts by: Judy Wang

As the title says, I am wondering whether I should form a LLC company to protect my investment or use Umbrella Insurance. Here is my situation: we have W-2 work as our main income source and 1 primary home and 5 investment properties (all single family). We heard that it would be better to form a LLC company to hold the assets so that accident will not impact all assets. LLC can also have tax-saving benefits.

We consulted with a CPA before and she just said that LLC can protect our assets but not that tax-saving. Having a LLC company is also costing money. Given that we only had 3 properties when we consulted with her, now we have more properties and I don't know whether this may have some impacts. Also, Biden's tax policy looks like that good for small LLC company....

In addition, I heard that umbrella insurance could also protect rental properties. I didn't use this before and don't know whether buying umbrella could be better than forming a LLC.

Hope I have make my question clear and any suggestions are welcome. BTW, any CPA professional who could help on this question is welcome to contact me~ I am in CA and investment in TX. Thanks

Judy

0 Votes

Originally posted by @Bruce Lynn:

Happy to help you with foreclosures, but there are very very few right now.

Wholesale....well, that's just a marketing term for non-on MLS, wholesale is now the new retail. Many of the good investors around here will tell you wholesale deals are for newbies, not experienced investors. When you get 20-30 investors to show up at a "wholesale" deal showing at 2pm and see the bids opened at 3pm....to me that is very much "on the market" just not in the MLS.

The hunt is tough now. Have you though about direct mail or cold calling?

Hi Bruce, thanks for your reply~ I have never used direct mail or cold calling before. I wanna know more about the foreclosures. I will PM you my contact and we probably could have a better communication.

0 Votes

Hi BP community,

As the title says, I am looking for a Dallas, TX, local realtor who can help me find good deals in wholesale and foreclosure houses. I have several rental properties in Dallas metro area and all of them were purchased from normal MLS source. I am considering to buy a foreclosure house or wholesale house to increase cash flow and expand my portfolio. Any advice and recommendations are welcome! You could send me message directly.

Thank you~

0 Votes

Originally posted by @Dan Rowley:

What I've not seen mention of in this thread is the reality of our historically low financing rates and it's impact on the 1% rule. This 1% rule has been around a long time and so over most of it's history interest rates were much higher. Obviously, current prices have adjusted upwards party as a consequence of this cheap financing.

So what I'm saying is if you were to compare cash flows on the very same property back in a more 'normal' interest rate environment of 5-6% interest rates at the 1% rent/value VS. at today's 3-4% interest rates at a .75-.80% rent/value ratio = you'll find that the cash flow yield is essentially THE SAME.

Of course, if you are buying cash this does not apply but if you can qualify for financing today why on earth would you not finance your purchase at the current rates?

Hi Dan, you're right. We have to consider current extremely low interest rate. Thanks for sharing this!

0 Votes

Hi BP community,

Disclaimer: I know each city has its advantages and disadvantages. I am comparing them solely based on their rental return and potential appreciation. I love all three cities. ><

I plan to purchase an investment property, a duplex or SFH. The house price is $200k-$300k. I am looking for cap rate exceeds 6%. Since I am in CA, local property management fee has been considered.

After talking with several realtors, I have narrowed down my choices in the following 3 cities:

1, Tampa, FL

2, Charlotte, NC

3, Columbus, OH

For 1, FL is a hot market right now and I believe that this hot trend will continue. Tampa is always in the list of investors. Given the numbers my realtor provided, duplex is over 300k but cap rate is only 5.5-6%. My concern is that the price has already been high but the rent hasn't increased up accordingly.

For 2, I just personally feel very interested in. I haven't seen any big boom in Charlotte house market. The cap rate there could exceed 6%, probably 6.5%. However, I am concerned that the city growth potential and how rental market really is there.

For 3, I know Ohio State is there and this big university can boost a good rental market. The property tax here is highest among the three. The campus nearby area is hard to find good deal. Hasn't ran out a cap rate figure but I am not sure it can reach 6%.

I have never been to these 3 cities before, so I have no first-hand experience in these cities. Given the pandemic, I probably couldn't fly there to do on site visit (I know this is the best way to know a city). Wanna hear more local people's voice and have more straightforward view of the cities' development.

Any opinion is welcome!

Thanks

Judy

3 Votes

Originally posted by @Courtney M.:

I have purchased 2 properties in Michigan that meet the 1% rule. These are good neighborhoods and I have good tenants.

Many people buying in states like California and Texas are looking towards appreciation.

Everyone has different goals. For most, 1% is used as a qualifier. There are lots of other factors to consider.

Courtney, cannot agree with you any more.

0 Votes

Originally posted by @Bruce Runn:

@Corey Hawkinson

I think you have/share a good lesson here. If it's already on the MLS, everyone will be looking at it. You have to hustle and take a risk. No one is going to be putting a 1% deal out there for someone to cherry pick w/o risk.

Because of covid/economy, some of the best buys will be mixed use buildings that have apt's and commercial spaces that are empty if you can figure out how to get the spaces rented out. I've done this before and they end up being killer deals but you have to add the value and take on the risk to fix up and re rent. Being successful takes work and it's not a deal unless you can figure out how to solve the problem the last person ran into.

Bruce, thanks for your advice and sharing experience. I will think about that!

0 Votes

Originally posted by @Brock Mogensen:

I'd recommend looking at other financial metrics as well like cash on cash, IRR, AAR, equity multiple. The 1% rule is good for a quick and dirty analysis but isn't enough to truly analyze a deal. That being said, I invest in the Milwaukee market where cash flow is high and the 1% rule can be achieved.

Thanks for your advice Brock. Not very familiar with Milwaukee market but open to it. Do you mind shooting me message and share more info?

1 Vote

Originally posted by @Lane Kawaoka:

Birmingham, Atlanta, Indianapolis, St Louis, Kansas City, Memphis, Little Rock, Indianapolis, Greenville, Jacksonville, Tampa, Houston, San Antonio, Little Rock, Milwaukee, Cincinnati, Dayton, Cleveland, Ohio, or other secondary or tertiary markets.

Thanks for your advice, Lane. I will take a look at them.

0 Votes

All Forum Posts by: Judy Wang

Judy Wang has started 4 posts and replied 26 times.

Post: LLC or Umbrella Insurance, which is better?

Post: LLC or Umbrella Insurance, which is better?

Post: Looking for agent who can do wholesale and foreclosure in Dallas

Post: Looking for agent who can do wholesale and foreclosure in Dallas

Post: Is there any city can meet 1% rule now?

Post: Which city rental market is better? Tampa, Charlotte, Columbus

Post: Is there any city can meet 1% rule now?

Post: Is there any city can meet 1% rule now?

Post: Is there any city can meet 1% rule now?

Post: Is there any city can meet 1% rule now?