All Forum Posts by: Duane Richards

I did hear back from my CPA, who said that it really doesn't matter how it's funded as long as the title for the properties always remain in the name of the LLC - which I'm guessing means quit claim deed actions won't work. Given that the loan collateral is always the property title, it doesn't seem like there is any other way than to fund through my LLC. If only I could lend my LLC the money from a personal loan at 3%!

@Scott McIntosh thank you! That was my understanding as well but as I have talked with a bunch of commercial loan officers to try and get funding in my LLC, they all ask the same question: "Can't you just get a personal loan and transfer it into your LLC?" Now I know!

I created an LLC in 2019 to invest in an opportunity zone, and now those properties are getting ready to close. I need to get lending for these properties, but as I understand the OZ qualifications, the properties need to stay in the name of the LLC. I thought I might be able to fund using personal loans (better rates, 30-yr fixed, etc.) and quit claim back into the LLC at closing. However, I wonder if this would disqualify these properties as they need to remain in the LLC that was setup as the designated OZF.

Does anyone have experience with this or understand the tax implications? I've reached out to my CPA and am waiting to hear back, but when filing taxes with him for 2019, he had to "learn" the OZF part of my deferred capital gains, etc. as it was new to him... Thought I would reach out here on BP while I wait!

Hi @Melanie Schmidt,

My wife and I went down there in August, looking at STRs for our "first" investment. After interviewing a few property managers down there (fees from 25-45% of gross rents - ouch!), we found that they are still filling most rentals at higher occupancy rates than a lot of other destinations in spite of the saturation of rentals in the short-term areas. However, the competition had gotten so intense (saturated as previously mentioned) that nightly rates have dropped significantly. With purchase prices climbing so quickly, the rent to value ratios have dropped as well, making it difficult to cash flow with anything short term.

There is still a decent market for SFH long-term, but the prices again are prohibitive compared to rental rates. We find that they're almost as bad as our home market here in Utah County.

Good luck to you and your future investments!

Duane

@Monte Blunk I am in the same boat you are. I met with my accountant, who highly recommends an LLC for my properties (even possibly one LLC per property), my lawyer, who actually suggested a separate LLC for my own property management (if you're thinking of managing them yourself), that way all the lease agreements etc. go into an LLC with no real assets aside from a little money in the bank used for CapEx, maintenance, vacancy, etc., which I thought was an interesting suggestion. He also suggested I stay away from a series LLC for now, as they haven't been "proven out" in courts in Utah, they're only about 5 years old here according to him. Here was an interesting article on Series LLC's and asset protection I found: https://www.corporatedirect.com/c-corps-s-corps/series-llcs-where-angels-fear-to-tread/

I'm also looking at investing out of state, which means I either need an LLC (or multiples) in each state I plan to invest, or I can form in Utah and register with a foreign qualification in another state (or something like that). I'm still not sure what works best, so I'm also open to any follow-up posts!

@Crystal Brooks thank you for the podcast suggestion and articles, I'm listening and looking right now!

@Jeffrey S. Breglio, thanks for your advice as well, I'll be checking out your web site content.

I haven't used them yet, but am really curious on how the whole process works - I've been doing the due diligence, looking at rent averages in areas, checking out the ledgers, and paying particular attention to occupancy status and inspection reports. I've worried about the whole process, not sure how it works, so I haven't placed a bid yet, but I hear they can connect you with PMs etc as needed for your situation.

@Zach Evanish I would be interested in connecting with you to discuss more details with you or someone at Roofstock!

Welcome to BP, Oz! Always glad to see another Happy Valley resident on the forums here :).

@Skyler Smith, do you primarily invest in Logan? I see a lot of deals that look pretty good in Ogden, haven't looked in Logan yet, but I love that area!

Hi Chris,

I'm a tech industry employee down in Utah County, my wife and I have been looking into REI for the first time this year, and just recently joined BP. I've found their rental calculator and other tools to be invaluable. I have been using the Utah MLS for a while now to scope out potential properties. Unfortunately, most home prices in our market are outpacing rents, so I started looking at multi-family properties as a way to offset some of that. We found some pretty good deals (according to the numbers) in Ogden and south of Provo, but I'm guessing we just don't have the contacts to find the really good deals just yet. We even took a day trip up north to scope out 6 or 7 properties we found and interview a property management company up in Ogden. A fun exercise, but nothing has come from it in the way of deals yet! Though I did really enjoy the PM interview and was impressed with their answers.

Oh, and I love golf!

@Richard Robbins We are big fans of St. George area and recently went to stay in Las Palmas in August looking for rental opportunities, both short and long-term. We found that PMs down there vary greatly from 25-40% rent for nightly. We talked with Red Sands and a few other PM groups. Is your current PM recommendable and are you willing to share their name? Or is the verdict still out?  

I was also wondering about the income potential - seems nightly prices are dropping in the area but they are still being filled at a pretty high nightly percentage, is that your experience?

Thanks for the summary post!