All Forum Posts by: Jeff Davis

Thanks for the reply @Ryan Daigle. 

We were initially skeptical of LLC because we were told that lenders typically won't offer loans to the LLC. If we were able to secure a LLC loan, we'll likely have to put down 20%+ and may pay a much higher rate.

Another thought was to buy the house as myself and get the mortgage in my name. THEN create the LLC and transfer the ownership to that company. However, the transfer will violate the due on transfer clause and the lender can call the loan balance due immediately.

As a result, we're kind of stuck in the middle. We're trying to determine what is the best course both from a financial and liability standpoint.

Person A + B want to partner on an investment property. Person A will take out the loan in his name, while Person B is not on the loan. However, Person B agrees to manage the property until ~year 3, when person A + B jointly refinance.

Additionally person A + B will enter into an operating agreement which binds both parties to these conditions and offers 50/50 equity in property.

How do we structure this legally while minimizing the liability, in absence of a LLC.

Side question:

Are there different lending rates between a LLC and an individual? What is typically preventative from going the LLC route?

Thanks for chiming in TJ. I currently don't have management fees baked into my model, which is why this figure seems high. My mom could potentially serve as property manager to save these costs, but TBD if that would work logistically. Assuming I go with property management, cash flow would look more like $500/mo. This assumes ~40% average occupancy rate annually.

Happy to discuss more offline too. I'm going through a lot of research right now and planning on a visit to the area on the ground to dig deeper.

Hey Everyone,

I'm just getting started here and currently don't own any properties. I'm definitely a "n00b". I have a full-time job and my short-term goal is to get my feet wet and have a property that generates cash flow of roughly $800/month, on average, after expenses. I'd like to build up a cash reserve through this first property so I can re-allocate the cash flow to additional properties in the future.

The reason I'm looking into PS is because I live in LA and it's a relatively close proximity, with seemingly good short-term rental demand throughout the year (although mostly during winter and spring months).

I'm wondering if anyone has any experience in this market? Specifically what the demand looks like and what to expect in terms of seasonality. I also understand that certain areas have short-term regulations (specifically Palm Springs). Others like La Quinta, PGA West, etc. have looser restrictions which is where I'm targeting.

Thanks!

JT