Real Estate Investing Start Up

[Shaine Grogan]

Hi BP Network. I'm excited to say that this my first start to a discussion on BP which I've been active on for a few months now. I'm looking forward to meeting like-minded individuals on here. 

First, about me, I am a commercial code consultant. I frequently work with Building / Fire Officials throughout the New England area to develop code compliance approaches for commercial projects or to assist with evaluations of commercial building acquisition. As a fire protection engineer, I can offer a broad range of assistance for fire / life safety considerations that BP members face.  Feel free to reach out if you have any questions in this field.

From everything I have read, the Law of the First Deal seems to be a consistently echoed message stating just take action! I am confident that I will be a REI by Presidential Election (my personal goal), but I want to make sure that I have a calculated method that sets forth a strong foundation.

It seems that the BRRRR strategy is a great start-up strategy but this works best with cash only purchases and rehabs (as David Green noted in his book). Alternatively, an 80-10-10 (80-20) loan with a house hacked property seems to be another solid approach that would allow me to act immediately. I am currently in a position that is flexible to either continue renting at my current apartment and buy an investment only property or to house-hack my first property.

My question is, how does an LLC fit into the leveraging with either option? For both the BRRRefinanceR or the 80-10-10 house-hack approach, it seems to be most appropriate to take advantage of the current impressive rates offered from a conventional or portfolio loan. How does an LLC fit into this? I'm interested if there are any book, podcast, forums, etc. on this topic. I certainly want to take advantage of the benefits of owning the property in an LLC but does it have to change the financing method?

Thank you and looking forward to the discussion!

[Matt Pastier]

@Shaine Grogan Hi Shaine - I would actually focus more on getting proper insurance first and then consider the LLC. When I had 2 properties I got an umbrella policy that covers $1 million. It's not expensive and will help to protect you. I'm not saying not to get an LLC, just saying that insurance will be your first line of defense if something were to happen.