In this case, it would depend on how the operating agreement was written, or the preferred method of the managing member.In either situation, as long as the LLC is registered and in good standing in your state, and has legal title to the real estate, then you will have the protection from liability normally provided by corporations.

The operations and management partner will actually be on title and assume any risks associated with the property.

Just because the HOA has low Association Dues does not mean that it is collecting enough money to cover it's operating cost and saving in the case of an unexpected maintenance emergency.

I have helped many buyers purchase REO'S in the DFW, so I know how most banks operate.

You could probably do either yourself; however, be sure that you have a good lawyer set up your operating agreement.

Lynn,The title of your post says "their" as in agents in the plural sense.Never in my post did I say anything about you.I posted real world experience on how things operate.There is a real world difference of how things "should" operate and how actually things "do" operate.Buyers can say how unfair buying REO's is and they get beat out etc. and cry foul OR accept that the world is unfair and figure out how to get their share of the deals.If you buy multiple properties it helps versus a one off.An REO broker is not going to want to tick off an investor that buys 20 properties a year from them just to give you a deal where you buy one time.

Robert,They are typically subject to the state's home rule as you are operating in their state.

For this purpose, just divide the annual net operating income (50% of gross rent) by .09 as the high end, divide NOI by .11 as the lower end of your potential range.Also, ask an agent to do a BPO/CMA to provide a point of reference.

Then divide this actual cashflow into the "all-in" number to get your COC return.And for the cash scenario, you already mentioned that you cashflow is $5400, so your cash on cash return is:$5400 / $53,050 = ~10% (not 20%)I think the part you're missing is that the $5400 (in this example) is your "Net Operating Income," not your "cashflow."

This unit will rent for $650 per month.With $700 total in operating expenses and $2,100 per month coming in, this house will be generating $17k net income this year.