Looking for some advice regarding the best path forward

[Trey Fischer]

Hello,  

I have a couple of general questions to ask, but some background.  We rented out our first home for about 5 years, so I am familiar with land lording and all the work that can come with that.  Towards the end of the five years I used a property management company so I didn't have to deal with the headaches since I lived out of town from the rental property. 

Here are my questions:

1. If we are looking to purchase a few properties does it make sense to get a LLC and if so how do you transfer the property to the LLC without causing a bank to use the Due on Sale clause?

2. If half of my assets are liquid and the other half is in a retirement account what advice do you have for investing in real estate?

3. I am looking to be a fairly passive investor, what do you believe is my best path forward?

I am located in the Texas Hill Country, BTW..

Thanks

[Michinori Kaneko]

Hey @Trey Fischer welcome to BP.  

for your question no.1 very commonly asked question on BP. i would just search for it. there are two school of thoughts I lean towards no LLC until you grow bigger (e.g. 10 units +). I haven't reached that point yet so I have the property under my name.

2. there are few options. i've liquidated some of my stocks to fund my real estate investing. as long as you project better return from real estate (remember you get taxed on your capital gain so put that into your consideration), you can liquidate your assets and buy real estate. alternatively, you can do self-directed IRA which allows you to buy stuff other than mutual funds in your IRA. this is also pretty commonly asked question on BP so you can search for it.

3. that depends on what your goals are.  what do you want from your passive investing? what is your goal?  how much money do you have and how much money are you looking for? For instance if you had $100 million  and you only need $100k per year, i'd tell you to go invest in CDs or US Treasury because its safest and it gives you enough to live off of. 

hope that helps.