looking for HELP convert in illinois

6 Replies

Hi All, I have approximately 150k of a 270k property in cash. Do I take the 100% liquid currently in stocks to fund the deal? or do I take 20%? Do I position onto LLC and a solo 401k or self directed. Property is ~40k under comps Looking at buy and hold with tenant that is already in place for long term....10yrs.+ Property is 3bdrm 4bath. Looking to rent to family @ 1500/month and tenant pays all utilities. Thanks
@Bill Nolan I don’t know anything about Tinley Park, other than I go out there a couple times a year for a concert. But an almost $300k home and your going to rent for $1500 sounds like dog **** to me, personally. I don’t mean to poo-poo your trade here, but maybe you know something I don’t? I’m buying property in west suburbs for $125k and renting them for $1100-1200 and have significantly less sq ft to be concerned with which gives an ease of maintenance factor that I prefer. In a $300k home your going to have all that yard,m and everything that comes with it. Great tenants do not rent $300k homes, too.
@Christopher Leon Thanks for reply. I was figuring $500 per bedroom as a rule of thumb. That's how I came to that number. Thought process is with solid tenant in good area close, I could use equity from this to parsley to second and maybe third that cashflowed higher
@Bill Nolan Forgive me Bill, I just realized you are from TP, it didn’t say if the property was or not. As far as some of your questions goes, without knowing you, your motives, experience, etc I can’t really say one way or the other. The benefit of paying all cash is you’ll have a higher cash flow. I like the 20% method too because you can leverage more property that way, although your cash flow won’t be that tremendous depending on expenses. Personally, I do not like the idea of a 3bd 4bth Unit - sounds like a maintenance nightmare to me. I have never got a LLC so I can’t say much to this. You should ask an attorney about this instead.
@Bill Nolan Assuming you can manage and maintain the home cost effectively, meaning keeping it occupied, collect rents, and doing the repairs then your plan could work. Buying property with built in equity is the right move! Not a fan of keeping money in stocks either right now due to little to no control. If you take all that dough out and dump it into this property at least you can dictate where it goes. Good luck

NEVER rent to YOUR family. Someone will take it wrong and tell the rest of the clan what a jerk you are. What happens to your taxes if you liquidate the stock? Can you use the stock as collateral?

At this time LLC and Corporation decisions are unnecessary if this is your only property.

Self directed IRAs must be an arms length transaction with all of the funds coming from the Self Directed IRA. You must first legally fund an IRA and accumulated the cash there. You can then convert it into a self directed ROTH IRA. There are annual fees with the custodians of self directed IRAs. Do not convert your Roth until AFTER you have the working capital in place. Early conversion means wasted annual fees.

Research Illinois Land Trusts as a way to hold title, achieve privacy and avoid probate. Buy lots of insurance ($1,000,000 general liability). Then buy more insurance (From 1 to 5 million commercial umbrella). The umbrella protects you from Extra stuff not covered under a general liability policy.

Your company should lease the unit from the trust with the right to sublease. Get a lawyer for this.

Once you have acquired a few then worry about your business entity.

Read the book "Lawyers Are liars" by Mark J. Kohler before taking another step.