All Forum Posts by: Account Closed

Getting started in rental properties hasn't been working out too well. Been trying to acquire a rental property for months and so far, nothing. The mortgage (found out I can't get a 30-yr, low 4% interest, 20% down mortgage unless the property is my name, not in an LLC) plus the expenses puts small multi-family units at a monthly net clear of $100-125/door and an SFR monthly net clear of $175-200, both with a 7%-8% cash on cash return. Those numbers are not acceptable.

Not sure what to do next.

I'm looking to branch out into buy and hold rental properties in my area. Found what looked like a decent deal, that is until my mortgage broker told me I can't get 30-yr residential mortgage because the property would be in an LLC. He said I can only get 20% down, 4.xx%, 30-yr residential mortgage if the property is my personal property. In today's litigious society, aint no way I'm putting a rental property in my name.

There are only two other options I've found, both were more expensive. The first was hard money, 30-yr amortization with 6.5% - 7.5% interest and 25% down. The other option was a local commercial lender with 4.75% rate, 20% down, but only amortized over 20 years and with a balloon at 5 years.

The monthly P&I for the two options was within $20 of each other. However, either option was significantly more than a 30-yr 4.75% mortgage. This killed the deal.

Where does one find a 4.xx% (or even a 5.00%) 30-yr mortgage for a rental property closed in an LLC? Does such a thing exist?

Other options and ideas?

I'm in an area where finding good deals on rental properties is very challenging which makes financing even more critical.

If you provide a piece of equipment to someone who is not trained on how to use it and you don't have the qualification to provide training, then you have created a situation where you are liable. If the tenant injures himself, his argument is that you required him to use a specific piece of equipment, but you did not provide proper training in the use of said piece of equipment. (Proper training means that you are qualified to issue a certification to the trainee. Yes, even for a lawn mower.)

As many have said, NEVER provide tools or equipment to tenants.

Placing the property in an LLC is the first layer of protection. Landlord insurance is the next, then an umbrella policy. This is what many landlords have in place. Does is completely protect you? No, but it is sufficient for the vast majority of situations. Also, don't have all your rental properties in one LLC.

The next level of protection is to place the property in a corporation. A corporation offers more personal protection, but can create additional taxes.

Another option is to use an offshore strategy, which has it's own set of pluses and minuses.

I know an excellent asset protection lawyer who can advise you. PM me if you want his contact information. 

@Joseph Pumilia I live and invest in the New Orleans area. What kind of investment properties are you looking for?

Quiet fans aren't expensive. Use this as an opportunity to show wow service, buy and install a new quiet fan.

I've been flipping for a while now. About 4 months ago I decided to get in rentals. I started out trying to net $300/mo for a SFR or $200/door/mo for 2 to 4 family. Seems these numbers are very hard to achieve in my area. Maybe I just need to find a piece of land and build a 12-unit building.

Thanks, that is what I thought, but wanted to make sure.

What is the 10%-20% markup over? Your own crews? What it would cost if you subbed everything? Something else?