All Forum Posts by: Daniel Warren

@Daniel Dietz

thanks for the reply. the numbers on this building are 215k asking price. I ran the numbers for her with a 20% down payment and 15 year loan @ 6%. came out with about a 14xx payment. It didn't meet the 50% rule, but that doesn't concern me too much, as she is good with money and would be putting up all the rent money and on top of that, has the reserves to cover any hiccups that could come along before she built up her reserves from the rent money. The owner told me his taxes were 1500/yr and insurance was 1800/yr. It also has a good size out building on the property that a few coin operated laundry machines would do great in. she definitely wants to walk out before 15 years, so she would be paying extra principle payments to pay off early. It would be I nice little set up to have paid off when she is ready to retire.

as for me, (lol you sound like her) I brought her this deal because I am concerned about her when she walks away from the job. My mom is a very giving person and spends a lot taking care of others. All my life i have watched people i love go through the endless cycle of the poor dad in rich dad poor dad. I don't want her to not do anything for herself. I don't want to see her struggling to make it off an ever depleting social security, especially after living as comfortable as she has these last few years. I told her I would handle everything for her so she wouldn't have any extra stress. Its kind of my way of paying her back for all the help she has given me all these years.

I don't have any properties myself at the moment, but I have a sfr that I am going through the bank with right now. If that works out I will have my first investment property. I want to be the rich dad. I want to teach my kids to be rich dads(moms).

@Steven Hamilton II

thanks man I'll run it by her and see what she thinks. she didn't know about the tax bracket thing. I got her wheels turning on it. Now her only issue is timing with her taxes coming due.

@David Beard

@Ned Carey

@Steven Hamilton II

awesome guys and thanks so much for the advice. I learned something as well because I didn't know that either. that's why I asked because I have no experience with taxes other than being sad when I look at my check, and I didn't want to give her any crap info. thanks again!

thans for the reply David. She's old school work for your money, save what you can, and die. She's scared of risk and the whole "making your money work for you" investing stuff. I've went from an automatic no on the issue, ran the numbers for her with all the formulas I've learned from BP and got her interested because breaking down the numbers looked good, to taxes being the last road block. can she form an llc and not pull any money out of it and just keep it in the llc's account and it not affect her income? I tried telling her that as long as the new income is more than the new tax responsibility then she still comes out ahead lol

a local deal popped up in my hometown for an 8 unit apartment. works out to a 15.6% cap rate. has 4 2br/1 and 41br/1 and rents are 400/300. 3 empty atm but he says he has calls all the time and stays full most of the time. he is selling do to a critically ill grandchild he wants to spend more time with. no way i can come up with the 20% down on this, and i would love to get my mom into this deal. she is super hard headed about securing her future and im trying to get her into some real estate for when she is ready to walk away from her job. i almost have her sold on it and her main concern i cant get her to move past is the tax implications. she is a managing partner in a sonic drive in. she makes 20% providing she makes a certain profit %, plus a small salary, plus they let her buy in 25%. she is afraid of this putting her into another tax bracket. i told her to talk it over with her cpa, and i just wanted to run by the community here to see what answer you guys had as well. she is a money hoarder and im trying to get her into this for when she walks away she will have something. they will buy her out at 75k when dhe leaves and she thinks thats gonna be good enough. she does no 401k or ira or anything so i am trying to talk her into this for some passive income when she retires. help me sell her on the taxes please!!

@Joe Gore

So as far as funding the llc, I can give it any cash reserves I'm sitting on, and say I had 100/m from my income to add to my investments, I could give those to the llc without any mixing issues?

As far as the the rest, I don't have the cash to pay for it outright and plan on using leverage to grow as well, so how should I handle this.

I know its still a risk and I plan on carrying insurance, but I just want to make sure that I handle my llc correctly to maintain separation. Thanks for your reply

I have been reading a lot of llc threads and I have a general question and a couple of specific questions. I have been reading about the need to separate my stuff from the llc stuff. I have caught bits and pieces of things in various threads, but my general question would be could someone list in one place everything I should do to make sure my llc looks like a separate entity from me.

My more specific questions would be what to do if I personally buy a rental property then form an llc. How do I get it to the llc without calling the mortgage or comingling. My other question would be how to fund the llc without it being considered mixing my finances and the llc's finances?

The primary scope of what I want to do is buy and hold sfr's for passive income if it makes a difference in what advice to give me. Thanks in advance

nice topic. long story short, I made a LOT of terrible financial(and other) decisions. im 31 next month and just now getting my head on securing my financial future. I have a lot of debt because I had no spending control. I liked my toys (guns, etc) and spent every extra dollar I could on them. if I wanted something I found a way to get it. you guys have touched on the budget side, so I will add what im doing now to get my down payment for my first deal....i'm selling some of my toys and not getting that new truck. I will replace them when I get my finances secured like I want them. I have a wife and four kids, so spare money is tight, but im determined to get out of the rat race and the things I am getting rid of are not near as important as my financial freedom!

@Jim Walker

thanks for your figures jim. unless i get completely different numbers when i sit down with him, it would appear he's trying to sell me some pride and past sweat equity. i would like the park but i dont want to overpay and not turn a profit for 30 years. 100 dollars is about what it is locally. 4 or 5 parks in town right around there

@Andrew Hearn

thanks for the advice. you may be right, she might not want to go that long. I'm just trying to make sure I'm figuring what i need to figure right and playing around with the kind of numbers that make it work best for me. i know it rents for 450, so i know what i gotta have to make it work for me. for 5 years, that's more down payment money i have to come up with to make it work. I'm still kicking around trying to find my first deal. I'm still piecing together the financial situation. all i know now is they owned a small business in town, and i think its closed now and they have left town.

@Ned Carey

Thanks for your post Ned. i am still trying to put together my first deal, and any investment is a risk, but i have to get in the game to get the ball rolling. Right now I'm looking at being able to scrape up about 8k to get started in this, and that's partially why i wanted to go a little longer and not put the whole 8k down. I could get a coc that works, and have some reserve to get me through. i also would like to use it to get into two deals.

here is the exact details of it so maybe you guys can give me some 8k advice. she has the place they lived for sale. a nice 16x80 with a built on room addition that makes it 4br/2b. It is very nice as they have done remodeling on inside. They want 15k for it.

The other is a 3br/2b house close by in the same neighborhood that is also a nice little house. They had it as a rental property and it is currently rented. Tenant has been there for 4-5 years and she has had no problems with them. Asking 22k for it.

Like I said guys, I'm trying to get into my first deal, and I'm not depending on this for my income, so as long as it at least pays for itself, I will be gaining ground in the asset column that currently has zero items. I appreciate all the advice guys, keep it coming.