New Investor From Ohio

[Trent T.]

Hello everyone!

This is my first post ever on any forum. So here is the deal, I bought my grandfathers single family residential property in the Dayton Ohio area for $20,000 cash (3 bed / 1 bath 1000 sq-ft). I spent about $8,000 in updating the place to rent since nothing was updated since 1952. I have a good tenant who pays on time so far in the house. The house is in my name. My question is and its a broad one....where do I go from here in regards to a LLC and equity in the house for the next property? The house should appraise out at around $30,000-$35,000.

I have flipped one house back in 08-09. I bought the house with a partner for $6500 and put in about $5,000 which resulted in a sale to another investor for $25,000. I'm thinking of flipping some and renting when cash flow is there. Any help would be greatly appreciated!

[Mehran K.]

Welcome to BiggerPockets @Trent T. , thanks so much for introducing yourself to the community! Grats on your first ever forum post as well :)

Since you own the house outright, you can tap the equity via a mortgage or a line of credit. Many conventional lenders don't like to operate in the sub-$50k space, but some will. If you go with a conventional mortgage, or a line of credit on the home, you'll have problems if the title of the property is already in an LLC. You could pull the equity via one of those methods and transfer the property to the LLC afterwards. Be sure to do research on the Due-On-Sale clause if you're going to do this.

Also, you could transfer the property to the LLC first, and attempt to find a portfolio/commercial loan from a local bank. They typically lend to LLC's, but the terms are a lot different than a conventional 30 year mortgage.

If it were me, I'd keep it in my personal name an dtap the equity via a Line of Credit or mortgage.

See you around the site!