All Forum Posts by: James Elden

My question solely relates to the mortgage aspect of this, I am thinking about buying a house in Florida and using it as a primary residence, so I would be using a loan that is meant only for a primary residence. I plan to live there at least 6.5 months out of the year but may travel to another state during the other months. I would like to rent it out as a short term rental during these times that I'm away. I am wondering what the maximum number of days you could normally rent out a primary residence would be for a house that has a normal primary residence loan? 

David, thanks for the detailed reply,I think a management agreement may make the most sense. My main reason initially is just to track business related expenses more easily and keep my personal name out of things as much as possible although I realize I'm not protected fully from liability. Maybe I'm overlooking something and I could still do this though using a fictitious business name and keeping separate records I will look into that more as well.

I'm aware of the possibilities for either transferring a property I own in my own name to an LLC or using a land trust to hold title however I'm looking into this more deeply for now while planning to buy an initial property in my own name and start renting it out as soon as possible (I will be getting an umbrella policy). I will be using a property management company and would like to setup an LLC to deal with them and also to use for anything related to my business, for example, I would have a business credit card, mailing address, etc under this LLC. I realize this will not fully protect me and I could be at risk but I don't feel I have enough assets to have to worry at the moment so will rely on my umbrella policy for liability coverage. I'm assuming it is possible for me to setup an LLC that handles the actual renting of the property so it is the entity contracting with the property management company rather than myself directly? I'm curious what the actual mechanism is for this, would I need to draw up a lease to lease the property from myself to my llc so that the llc can then allow the property management company to rent it out? Also any hiring of contractors, etc I would want to have them deal with the LLC rather than myself as a person.

One last question is whether the LLC needs to be in the state that the rental is in or could it be from any state? Thanks for any info.

Thanks, it would not be a residence, I would have minimal personal items there, wouldn't even have a tv, etc, would just be there to supervise and even do some repairs myself if I'm able, sleep on an air mattress kind of thing. I would go stay somewhere else every few days I think also since I would probably get sick of being in a house undergoing major repairs. Sounds like I'm safe then, thanks for the info

I'm not sure I understand what you mean. I don't mean I would live there as my primary residence I guess I maybe worded it wrong. I mean staying there on days that repairs are being done for the purpose of managing the repairs. I would still have a different primary residence where I would live outside of this on days when I'm not at the investment property to manage repairs.

I am aware of the rules about an owner staying at their own rental property and that if they are staying there to perform maintenance / repairs that this does not count as a "personal" day, I don't want to trigger my property to be classified as a personal residence. I am looking at buying some fixer uppers as buy and hold investments to rent out so would be buying them using an investment loan but there would be a period of time where repairs are ongoing before a tenant moves in and I may want to live at the property to oversee the repairs and manage the work but I wouldn't necessarily be doing all of the work myself. I think that since I am there for the purpose of managing the repairs this would be considered the same as if I were doing the repair work myself? I just wanted to check that my understanding is correct, any info is appreciated.

I'm interested in investing in a short term rental in the Pensacola area that I would use part of the time for myself. I realize that it's hard to get something under $100k that would be in an ideal short term rental location but I'm curious if anyone knows if a smaller house in a "regular" neighborhood of Pensacola would have any viability as a short term rental? I realize the occupancy rates wouldn't be ideal but I do see some rentals listed on Airbnb that seem not in ideal locations but it seems they get at least some customers. Basically I would be happy just breaking even and also am willing to take on fixer project as this would at least give me a place to stay when I'm out there. Also I figure if it seemed possible but didn't work out as an STR I could then just turn it into a regular rental as a last resort. Thanks for any info.

I'm a first time real estate investor looking mainly in southeastern states to invest in single family homes and I definitely like the idea of owning a property in an LLC but this seems to present a lot of hurdles to getting a loan. I am originally from California which has a pervasive lawsuit culture and would never invest in California so maybe I'm over-estimating how much I need an LLC in a more business-friendly southern state but I am not sure on this as I'm not a lawyer. I'm wondering if anyone has general advice as far as whether it is less necessary in some states to have an LLC compared to others?

Something I've been looking into is buying lower value homes that are already move-in ready (or close to it) in the $50-70k range. So far I have contacted local credit unions and banks in the city and state where I am looking but this is a small city (under 1 million people) in a small mostly rural state. Also I do not live in this state myself and so far the banks and cu's have not had much interest in talking to me at all as they mostly all say they do not give investment loans for prices this low and also they do not loan to LLC's. I have seen posts from the past (some 5 years old, etc) where people talk about how they have a lot of properties that are worth around this same range of $50-70k (like 10 or more single family homes) and that they have mortgages on each. I am not sure if things have changed enough over the years that now this is not a range banks lend in whereas they used to or if there are simply some markets, like bigger cities, where there are more banks willing to do these types of loans? Any info is appreciated.

I've been using thinkorswim, nothing too amazing but it works for me and I like it better than interactive brokers.