All Forum Posts by: Arron Paulino

Hello! I am looking for tips on starting a local meetup group in the Bay Area, CA specifically in the Peninsula neighborhood. The only meetups I have been able to find are located in the East Bay or the San Jose area. I'm surprised there isn't one happening in my neighborhood. Any tips on how to begin and not have it be expensive to start? I am looking to network with like-minded investors looking to get into the real estate investing game or experienced investors willing to share their tips from their journey.

1 Vote

San Francisco, California

Quote from @Martin M.:

@Arron Paulino

Hey Aaron nice work getting started on investing. Search the bigger pockets forums here and you'll find a lot of useful information around LLCs. Many of the questions you have might've been answered in other posts. It's also a good way to get better educated on LLCs.

Here's some of the basics....

The legal side of LLCs and how they elect to be taxed or not taxed (google pass through) are two completely separate topics. Don't comingle these two concepts, legal and taxes. They're typically not one in the same.

In most cases (not all), especially when just starting out, you want your properties in an LLC that's in the same state as the property. If the property's in Idaho... you want an Idaho LLC holding that property and so on.

You apply for an EIN for the LLC. think like social security number for the LLC that you pricier to a bank to open a bank account for the llc.

Insurance coverage is more important than LLCs for your liability protection.

Keep it simple. Talk to an attorney about what you actually need.... maybe google LLC attorney or business attorney in your state. Meet with them and show them the properties that you have, and what you envision you'll be with your properties 1 or 2 years down the line. Ask what they'd recommend. Yeah it'll cost a few bucks to start but you'll be doing it right.

You want to start with an attorney that knows your specific state, (assuming that's where the properties are) because even though LLCs look very similar across all states, the laws around them are not identical across all states. There can be important differences from one state to the next.

Google real estate cpa in your state. ask them, based on your real estate model, how should the LLCs file federal taxes... none/pass through, s corp and so on. Hope this gets you started.

Good luck!

Thanks for the reply. I'll continue to do my research on the forums and educate myself.

I think I primarily need the LLC in order to get funded for real estate deals. I've just been buying personally so far and gotten insurance for coverage but have come to the point where I need to scale and get more funding instead of using my personal funds.

I can definitely do that in terms of holding an LLC in the state where the property would be. I've heard of getting one in Delaware or Nevada for better terms. But maybe that's not true for my case?

How does one obtain an EIN for the LLC? I've seen these around but never got to it.

I totally agree about insurance and getting them right.

Looks like I'll have to connect with more attorneys and CPAs so I can structure terms correctly and get taxes in order. I appreciate the input!

0 Votes

I started my real estate investing journey during the pandemic and have not needed to use an LLC. I have been able to structure each rental property to where it is not necessary with the correct insurance and property management in place using the BRRRR method.

I am now needing to set up my first LLC in order to scale up with other real estate investing opportunities. I've heard that an easy place to this up is on legalzoom.com which offers a basic one to get started with pro or premium options as well. This is a new topic for me as I could just be overthinking this. Is there a better place to establish a simple LLC to get started? Any advice on how to properly structure an LLC? Does this have to be set up in a specific state virtually? The process sounds like it'll take about a week to set up and be up and running. From the first few lenders I've spoken to, they need an LLC in order for me to do business with them and I know they are the real deal as I've been able to do my due diligence on them. Looking forward to the great opportunities that have come up by engaging in BP!

2 Votes

Quote from @Eliott Elias:

Big surprise, most contractors don’t follow through. I’m not going to give you advice here, that is up to you how to move forward. Thank you for sharing this with everyone and showing how sleazy contractors are.

I had a feeling this would eventually come. I'm taking this all as a learning experience of what to do and not to do going forward.

0 Votes

Memphis, Tennessee

Quote from @Wilson Lau:

Quote from @Arron Paulino:

I have a fix and flip project in which my previous contractor (who previously had been a rockstar) did partial work and has not followed through with his work. I regrettably paid him off (I know I shouldn't have!) and he keeps reassuring me that he will complete the work.

Trying to go through my options here:

- Sell the property as-is and offload to another investor looking to take on this project. My agent has told me that I essentially will be listing the property for what I had bought it for so I am at a loss due to the money I paid the contractor. I was really looking forward to this project as it would be my first fix and flip with good numbers. I usually BRRRR but wanted to generate income on the side.

- Find another contractor (that I will for sure vet better) to take on this project but I will need to find additional funding to get this going

- Sue my previous contractor. Not really sure how to go about this as I haven't sued anyone before but really am looking at this route to somehow recoup my rehab funds. I still contact him and he responds surprisingly.

Looking forward to the guidance of the BP community as I am sure I'm not the only one this has happened to.

If you are already 2 months behind, I doubt that anything will change. I would suggest hiring a RELIABLE contractor to finish up the job, sell the property, and cut loss. You should definitely look into legal action, but it's usually a lengthy process with no guarantee.

Yes, nothing happened as I tried to continually follow up with that contractor. I actually am in the process of finishing up the job and selling the property as planned expecting a loss in the future. The lengthy process is what I am anticipating so I'm currently doing what I can to proceed.

0 Votes

Memphis, Tennessee

Quote from @Andres Saias:

Hi Arron,

Fix and flip loans shouldn't take more than 21 days to close if you provided everything the lender asked for. If you're not confident about your lender for whatever reason, I'd recommend looking for a new one. There are several good ones out there who are pretty efficient, look for online reviews and reach out to other investors on bigger pockets to see what they recommend.

Hi Andres,

They ended up being a big scam! I moved onto another lender who was more reliable. Appreciate your response!

2 Votes

San Francisco, California

Quote from @Erik Estrada:

Quote from @Arron Paulino:

Quote from @Erik Estrada:

Quote from @Arron Paulino:

Has anyone used or heard of Owens Financial Group LLC? I am looking to seek funds from them but want to see if anyone has feedback to share. Look forward to the responses!

Hey Arron,

What are they offering that you are uneasy to work with them?

Hey Erik,

It's not what they are offering that is making me uneasy. It is the delay in getting financing in a timely manner so that I may begin my rehab on my fix and flip that is making me feel not very confident in their ability to deliver. Usually, I would think receiving funds would not take a month to get to me if everything as in paperwork and fees are settled immediately.

I see what you mean. So are you struggling to get your draws? Or getting the loan approved?

Fix and flip should take no more than 21 days to get approved.

Hey Erik,

They ended up being a scam and I learned the hard way. Good thing I caught their junk before I dug a deeper hole for myself.

0 Votes

San Francisco, California

Quote from @Michael Smythe:

You didn't mention how you are sourcing properties.

This will be a big key to your ongoing growth and success.

Too many investors are only buying off the MLS and think getting a property at 5-10% below asking price is a "good deal".

The reality is that a "good deal" is one that meets your investment goals. So, offer that price or less, not anything based upon what the seller is asking.

I obtain properties via the MLS or off-market.

I am on a lot of mailing lists so I get emails daily. I did make sure that these properties fit my buying criteria and are in areas that I've identified as good sections of certain zip codes.

I also use a spreadsheet to calculate the numbers of a property MLS or not so I don't just buy any deal.

For sure! I make sure to go off of my reasoning rather than the seller's at the end of the day.

0 Votes

Quote from @Jake Andronico:

@Arron Paulino

Congrats on your early success! Appreciate the detailed post.

That's very interesting. My parents have an SFR in Memphis and it was fire damaged as well. Luckily insurance basically gave them a brand new house.

In my eyes, you do not "need" to do anything. If you're OK with your strategy and the issues that seem to arise with it, then chugging ahead may make complete sense for you.

If your overall goal is to match or exceed your W2 income without having to think about it, then putting managers in place and maybe even paying off your rentals is what comes to mind for me.

If you were to sell your properties and 1031 into a multifamily asset, that could be an interesting option as well.

I'm sorry you had some bad experiences with a few individuals - never fun!

Thanks! I just wanted to lay it all out there and see how the community may be able to advise me.

Small world. The one that got fired damaged had potential but met a tragic end quickly before I could benefit from it.

That is what I figured as I do not plan to do anything drastic anytime soon. I like the idea of continuing to add to my rental portfolio and building experience along the way to prove to other investors that I am the real deal. It's been up and down with the return on investment monthly due to property inquiries or nothing going on which I like more.

That is the overall goal. I have property management in place since the beginning and working on paying the property off over time.

If the right opportunity did come up, I would definitely consider this option. One roof with more units is easier to manage than multiple individual properties.

The pain is temporary but the learning opportunity is worth so much!

1 Vote

Quote from @Noah Laker:

What's up Arron, I'm a broker and property manager here in NorCal (100+ listings on Airbnb).

Congrats to you for the aggressive growth strategy, and for having the clarity of mind to learn a lesson instead of get discouraged and quit.

I think your story highlights the importance of working with trusted partners. When you're dealing with such sensitive transactions, your partners will make or break a deal.

If you're thinking of selling off properties to consolidate, you should look at each one individually from an equity standpoint and consider what you'll be doing with the proceeds. 1031 into something closer to home? A lot of my clients right now are coming to Sacramento from other areas, mostly Bay Area investors.

Hey Noah! Nice to meet you and see you're also from NorCal.

I know I really wanted to get an aggressive start at the beginning since I have time on my side rather than wait. I've been patient and willing to learn on my journey so I don't fall for the same trick twice.

Totally agree! I am learning to really vet my team and make sure they have credible references to back them up so they aren't all talk.

I like the idea but I also want to build a stable and profitable portfolio with enough units where I can work for fun and not have to push myself too hard. I'd move to Sacramento due to the better living opportunity but I enjoy the life I currently have in the Peninsula. Maybe down the road.

1 Vote

All Forum Posts by: Arron Paulino

Arron Paulino has started 57 posts and replied 230 times.

Post: Local Meetups in the Bay Area, CA

Post: Starting my first LLC

Post: Starting my first LLC

Post: Contractor DId Not Follow Through

Post: Contractor DId Not Follow Through

Post: Owens Financial Group LLC

Post: Owens Financial Group LLC

Post: Real Estate Investing Portfolio Consultation

Post: Real Estate Investing Portfolio Consultation

Post: Real Estate Investing Portfolio Consultation