Updated about 9 years ago on . Most recent reply
Ive Always Been One For Thorough Checklists...
Okay, I admit, I am one for checklists and getting everything done, then moving to the next step. I am at the beginning of a 'buy-and-hold' strategy. Just want to make sure I get my affairs in order, so I wanna run through what I am gonna be doing, and posing some questions.
1st : File the LLC that will hold the properties (I am assuming LegalZoom would work for this?)
2nd : Get an EIN number and get accounts set up at a financial institution (I heard credit unions are a better bet to do business with, any suggestions in the metro Detroit area?)
3rd : Get preapproved for a loan through a financial institution. (What kind of rates would be 'good' and what would be 'bad' as far as where the market sits right now).
4th : Find a suitable home with a higher ROI (at least 8% is my goal).
5th : Purchase said property
Does this sound like the right way to go? Or am I missing a bunch of steps? Sound off! I need you vets here for help.
Most Popular Reply
@Jason Greenway You may want to reconsider step 1 and 2. There is a lot debate on whether a LLC is necessary for real estate investors, especially if you are starting out.
Step 3 will be affected by a LLC. LLC's can only receive financing through commercial lenders. Typical terms will be 5yr fix amortized over 20years. Residential lending will be 30 yr fixed typically around 4.5%
A common strategy by investors is to obtain a residential mortgage in their own name (30 yr fix) then transfer the property to a LLC. Again, you should do your research. Besides giving the bank the ability to call you loan due, even though its highly unlikely, you will also void your title insurance. Plus LLC's don't really property your assets. If you are being sued, after they sue the LLC they will go after you either way.
The process should look like this:
1) Get a pre approval
2) Meet with several agents
3) View properties online and in person
4) Analyze deals
5) Make 10 offers and hope to get 1