All Forum Posts by: Jacob Sampson

@Dan Wallace & @Jeff D.

I agree with what Dan said, regarding lender.  They don't care who owns the property because you are going to be personally liable for the debt.

I think it depends on the size of the property. I would not start a new LLC for each of my SFH's. Keep in mind that not only do you have to pay the annual fee for each LLC you also have to have taxes handled for each LLC (unless you handle taxes on your own). I pay $400 to have LLC taxes filed. Not sure if that price would go down if I had multiple.

I actually think it's as important if not more important to have an umbrella insurance policy.

When you form the LLC or when you transfer ownership of the property isn't that big of a deal. It can happen whenever.

It's the law baby.

@Wai Fung

This has been a popular discussion.  Just my $.02, I know everyone talks about creative financing, and it's the hot shot way to get into real estate, but, IMO, if you have to get too creative you're playing a game you aren't prepared for.

Just like in poker, play within your bankroll.   Step up to the larger games slowly and only once you have mastered the table you are at.

yeah, buy the place based on just duplex numbers.  If it still makes sense then move on it and boot the attic person.

No, don't worry about it.  The way I see it is if the market is so hot that you have to move that quickly then you probably won't get that great a deal anyway.  Plus, generally speaking in that scenario, they accumulate the offers over a 12-24 hour period and then evaluate them.

I agree with @Shanequa J.

Later, if you want to, it's no big deal to transfer the property into an LLC. Though, you don't have to. I didn't start an LLC until my 7th property. Talk to an attorney when the time comes.

Finally, I would add, I think this is a great way to tip toe into real estate.  I would caution you to look at this long term.  Don't go buy the house that would make a great personal residence, for you and your wife.  Buy the house that will make a good rental and be OK with living in it, a couple of years.

It appears as though, correct me if I'm wrong, you are basing the ARV off of Zillow comps? I'm not a fan of that. I would recommend more/better research into that area's valuations.

If this is your first deal then if it still looks good to you after you double the remodel cost and drop the ARV by 25% then there is probably a large enough margin to make this a decent first attempt. I would still recommend, at a minimum, having a realtor provide you comps.

Also, do you have reliable buyers ready to pull the trigger once you rehab it?

Remember, you want deals wherein, if all goes well you do great.  If a couple things go wrong then you make less money than expected.  If there are major issues you can exit break even.  Only a total catastrophe should lose you money.

All things being equal, I'm going with a $150k/year single man who travels over a family whos income makes that rent payment tight.

For great tenants?  Let it go.  That is $240/year. 10 days of vacancy eats up any gain.  For great tenants I rarely raise rent unless my costs have actually increased.  Once the lease is up you could raise rent a bit but honestly, I wouldn't even do that.