All Forum Posts by: Account Closed

 I actually minor in economics and an investor in Stock and FOREX (currency, basically like stock market but instead of companies, you invest in countries). 

It's actually not looking good if you are talking about economics. GDP and unemployment are the only thing positive right now. Inflation, wage gaps, debt, etc. are not keeping up like they should be which shows a sign that the economy is overheating (its a global thing). When it overheats, one of the markets will fail, most likely the stock market since it is already showing signs of investors hesitating. My RE market is already seeing it, lot's of sales and foreclosure are start to slowly rise again. Houses are sitting 75+ days on the market. Good for investors though since rent prices are increasing... people got to live somewhere.

LLC can protect your personal asset if a tenant tries to sue you. I don't think its worth the hassle to create a LLC if you have less than 10 properties. Reason being is the cost and structuring it the right way is such a headache. Landlord insurance on each property and an umbrella policy will cover the issue if you get sued. Having one LLC doesn't really help much; a good lawyer can trace it back to you.

I know some people here like to use LLC to collect rent, but you can just do a DBA if all you are trying to do is open up a business account and structure your finances.

If you really want the full benefit of LLC, it will be costly. Ideally you want each property in their own LLC and then on top of that, if you are self-managing the properties, you would need to create an LLC just for the management or the tenant can also come after you since you are the property manager. To me, its not worth it unless I get 10+ properties. Landlord insurance in each properties as well as an umbrella insurance can take care of majority of the issues. if it arises.

Also, I have noticed that lenders will require higher down payment and higher interest rate when you try to put it under a different name than your own. 

 Do you have a picture of the white oak flooring with brown paneling? A lot of older properties in my area have the paneling, which I normally stay clear from since it'll cost more to take em out and drywall than I would like it too. 

@Marc Roth Depends, if you are talking about rental market,then I can see it rising a bit since the fed is trying to match inflation, yet wage increase hasn't caught up. That means people have less money to put for down payments and less money = higher DTI. With higher interest rate, lenders will be more strict with DTIs. It won't be like last time, the government has a tight leash on banks now which is good for consumers, but bad for investors.

if you are talking about appreciation, then I think it will be stagnant or decline a bit for a while since people are less likely to buy during interest hikes and no wage increase. 

If we hit a recession (most likely the stock market), the RE market should hold especially those that are buy, rent, and hold investors. Some areas might actually see an increase in rental prices cause people need to live somewhere. You also got to think about the baby boomer generation. Majority of them are getting on to their later years and dying which will create more supply.  A lot of the 'adults' the baby boomers are passing their homes to can't afford another house or don't know how to invest/rent it out. 

I actually just put an offer on a home that I will be using as a primary home, the owner passed away after living in it for 20 years and her kids didn't continue paying for the home so now its foreclosed. They got so butt hurt that they took all the copper wires out, destroyed the sink in the bathrooms, covered the floor with trash and busted huge holes in the walls (saved me some money since I am doing a full rehab anyway). Thanks to them, I am able to put a $65k offer on what would normally be a $250k home (my market is still a buyer's market so homes normally sit 75+ days on the market) and there's only a handful of investors in my area so I don't really have that much competition since regular people won't touch it. Also the small investors in my area are so busy buying up a lot of properties in the area that will begin a $120 mil revitalization plan next year. 

Since I started my investing journey strictly thru stock and forex market, I think retirement accounts are a waste. For those that don't know how to invest in the stock market, go for it. Especially if your employer does contribution match. 

Only reason why I see it as a waste, is that you can essentially do the same job as the guy you are giving the money to and normally get a higher return (if you know what you are doing). 

Remember, the quickest and safest way to build wealth is having multiple different incomes from different sectors. 

@Cody Jensen

Doesn't sound like a good deal to me... Only bringing in 0.8% rent to 'value' if it is worth 6.4 million. For multi-plex, I would like to at least bring in 1%. In my market, the average is 0.9% for single and 1%-1.5% for multi. I made an offer in for my primary residence that is right outside a revitalization plan beginning next year, but I still want large equity from it (at least 15%) at closing. 

If you are still interested in it, I would just wait. That large of a portfolio will probably sit on the market for a while if they are trying to only get rid of it as a package. Sooner or later they drop the price down for a big investor to scoop it up, the city buys it off to convert to commercial properties (if that is in the plans for the revitalization project), or they are willing to break the package up.  

 That's a great plan! Six fig at 35 years old is not that hard to reach. IF you mean by six figs on just RE alone, then yes that would be very difficult. If you don't have full cash to pay for a house up front, you will need at least 25 properties cash flowing at least $200 a month after expenses and reserves have been taken out of the gross profit. After about 10 properties, you would need to start getting creative on how to finance the properties. Or have saved all the cash flow to buy houses out right. 

Good Luck! Wish I was at your age researching about RE. Great age to start!

So I have created a DBA and signing up for a Chase Business Checking Account to organize money flow and make filing taxes easier. My question now, if there was an expense/repair that I need to pay, should I use my personal credit card and pay it in full within a month or open a business credit card?

My personal credit card has a limit of $30k with only 4% APR and 2% unlimited cash back on all purchases. I was told it is very bad mixing business and personal together, but I don't have a LLC so I don't even think it matters with my situation (I do have umbrella insurance). Reason for paying with credit cards is cause I like to use the perks that comes with them even though I can pay in cash (I haven't touch my debt card in 2 years lol).

What do ya'll think/recommend? Can should I just use my personal credit card or open a business card with the DBA?

@Henry Davis

At 16 I was already paper trading in the stock market. Basically its a program that gives you fake money, and simulates buying/selling stocks using Real Time Market price. 

I would definitely read up on how economics work; very boring to some, but I find it really interesting.

I wouldn't recommend this route, but this is what I did:

Started learning about economics, investments, taxes, etc at age 15. Joined military at age 17 and saved almost everything I earned. Invested/traded in the stock market, now I am 24 and I can technically get out of the military and sit for the rest of my life (until the stock market crash), but I am now getting into Real Estate. Remember, rich people normally have more than 3 income: one active income and the rest passive. 

On track to retire at age 40 making twice as much as my parents that clears six figs in just passive income alone. 

Reason why I don't recommend it is due to the fact that you will probably be the only one with the mindset of investing in the military. Most don't think about it until they get close to getting out. Even though there are tons of benefit being in and the perks we get with banks are incredible. It's easier to learn and get into something when those around you are doing it also. On top of that, if you have others with like minded near you, networking gets a whole lot easier. Don't take school for granted (even though I turned down full ride scholarships to join the military). I think majority of it is useless since you can research it on your own, but the world does not think so and time to time you will get awesome teachers that can give you advise (trust but verify everything). 

There is no such thing as working too hard. I use to only sleep 3-4 hrs a day due to military duty, schooling, investing, and researching/learning. I still do at times, but if you want it; you got to earn it.