Rental Property Investor · Memphis, TN · Member since 2020 · 4 posts · 2 votes
Happy New Year BP Colleagues!
I am new to REI and I am looking for advice on how to start. I am located in the Memphis area and would like to start local. I am looking for any advice you amazing people are able to provide! I want to stay in the SFH to start. I would like to buy and rent out the properties.
I have listed a few of my questions below but please feel free to add any other actions you feel I should take!
How to find hard money (or other types of) financing?
Do I setup an LLC before buying my first property?
Do you recommend finding a few easy turnkey properties before going into BRRRR?
Thank you in advance for your help and any connections you are able to provide!!
@Brandon Jefferies Hi Brandon!  It’s awesome that you are getting started into real estate. Way to start this new year off right!
Regarding your question about Hardmoney, this is fairly simple to get. You can Google for a hard money lenders, but I like to start out with local lenders first. The way I found my current hard money lender is by asking around at my real estate investor meet up group.
Regarding your question about setting up an LLC, it is definitely not necessary for your first purchase. I transferred my first rental property from my personal name to my LLC a couple months after I bought it. I don't see anything wrong with that approach, but you may want to read some other forum post and talk to attorney about this to be certain. If you opt not to use an LLC though, make sure you have good insurance in place, including an umbrella policy.
And you can definitely do a BRRRR for your first property. This is one of the best strategies in real estate to build wealth. However, these properties tend to have more repairs needed, so make sure you have a budget and contractors in place to handle that type of work. Turnkey can be a good solution, although you don't have much room to add value yourself, since the property is already rent ready.
Good luck, and let me know if you need me to elaborate on any of the questions above.
@Brandon Jefferies Hi Brandon!  It’s awesome that you are getting started into real estate. Way to start this new year off right!
Regarding your question about Hardmoney, this is fairly simple to get. You can Google for a hard money lenders, but I like to start out with local lenders first. The way I found my current hard money lender is by asking around at my real estate investor meet up group.
Regarding your question about setting up an LLC, it is definitely not necessary for your first purchase. I transferred my first rental property from my personal name to my LLC a couple months after I bought it. I don't see anything wrong with that approach, but you may want to read some other forum post and talk to attorney about this to be certain. If you opt not to use an LLC though, make sure you have good insurance in place, including an umbrella policy.
And you can definitely do a BRRRR for your first property. This is one of the best strategies in real estate to build wealth. However, these properties tend to have more repairs needed, so make sure you have a budget and contractors in place to handle that type of work. Turnkey can be a good solution, although you don't have much room to add value yourself, since the property is already rent ready.
Good luck, and let me know if you need me to elaborate on any of the questions above.
Thanks for your sound advice! I will look for some investor groups in my local area. I see your an agent in MO. I have a friend in CA that buys quite a few properties in MO. Hopefully there will be an opportunity for us to work together on some deals!
Coming from the lender side, I'll supplement Dalyn's first answer to your question,
Here are some additional places that you can look to find lenders that may be able to help assist you;
- The ‘Network’ tab on BiggerPockets has a hard money lenders tab, and you can search by state.
- Local meetups
- Speaking with local realtors
- Speaking with title companies
Additionally, speaking with investors who are more experienced can be helpful. If they've had a good experience with a lender, then chances are you are setting yourself up for success down the road.
Lastly, online search/databases - Simply by searching online you can find a number of quality reputable national lenders. If you want to get more specific, then you can type in your location, e.g. 'Memphis' along with your hard money lender search query. 'Memphis hard money lender' would be a reasonable starting point.
Google is good way to find Hard Money. However, the best way is to ask people in your local REIA for a referral. I know it's harder to meet with Covid, but I would bet your local REIA has found a way to keep it's members connected.
It's not necessary to have an LLC to start. If you do decide to go without, just make sure you have adequate insurance to cover your assets in case you get sued by a tenant. I would recommend exploring an umbrella policy with your insurance agent.
If you buy the property in your personal name and then move it to an LLC later, make sure you get a new insurance policy. The transfer from you to the entity is considered a sale and you're original policy could easily decline coverage when you need it most. When you get the new policy, make sure you list yourself as an additional insured. Some banks will call the note due if the title transfers. They catch the transfer most often because of the change in insurance. As long as you're still listed in the policy, they don't usually care and will let it slide.
Whether or not you buy a turnkey property vs a BRRRR has more to do with your own comfort levels than anything else.If you're comfortable with renovations, then BRRR is a good way to go. You'll probably get your properties at better prices than you will with turnkey. However, if you're not comfortable with renovations, then turnkey may be the better path for you. You'll pay a little more for the properties, but you'll be getting a done for you property in trade.
Anyway, good luck and feel free to ask more questions.
Hey Brandon glad to see a local Memphian wanting to get it going here. You are living in a great Market to buy and hold. I live here as well would be happy to show you around our office and PM company and have a chat with you anytime at lunch or whenever. Here are answers to your questions.
How to find hard money (or other types of) financing?
Bridge Capital
Lending Home
Lima One Capital
Do I setup an LLC before buying my first property?
I suggest no as long as you get a good insurance policy your good *unless you have a lot of assets not worth the cost. Wait until you have a few properties then get an LLC for them for asset protection
Do you recommend finding a few easy turnkey properties before going into BRRRR?
Pros and cons to everything. My first suggestion is "house hack" a house you are living in or if you are renting buy a house to live in that can turn into a rental someday.