All Forum Posts by: Jeffery Rymer

I have to speak up here and politely object to ignoring all but the proven ones. As a newbie, who is looking to get into real estate investing but with out the cash to get some serious deals going, wholesaling seems like a good entry level experience builder. First, being ignored is not going to give you a way to prove yourself. I am not getting into wholesaling with some delusion of grandeur that I am going to make $20k on every deal. But rather if I can pull $3k-$8k and build my reputation, my bank roll, and my sources for acquiring BRRR property then I am on the right track. Shouldn't the deal be looked at and used to make a judgement? If I am new, but have a good deal, say a contract that nets me $8k and with ballpark numbers to show you getting it for 65% ARV then you would turn me away because I wasn't referred by someone else?

A one sheet could outline the deal, and from that your experience should tell you if the deal is worth looking at further?

From my research on the subject of multi unit property if you are going to flip the property you are going to need to have at least a year of renting to show the cash flow. The buyer is going to value the property, and the CAP rate is used.

If you want to BRRR, then you have to find out what the going rent for like units is pulling in and run the numbers based on income. I for example have my eye on a tri-plex. I know I can get $800 a month per door, or $2,400 a month. The bank wants $63k and rehab will need at least $24k. So the PITI @ 5% on a 20 year term would be something like $425 a month. Mind you that is after 20% down and out of pocket on the rehab.

If you want to take a HELOC on it to recoup the out of pocket you can find similar sized buildings with the same sqft in close proximity. Then use the property address to look up the last time sold, and how much at the recorders office. This will give you market value to run numbers a bank is going to use. If you want to get a business loan it will go back to the cash flow. I know Brandon is in the multi family and Grant Cardone is a good resource too.

@Senthil N.

The premise of the book is an asset brings in cash, a liability takes cash away. So if you house isn't bringing you income, it's a liability. The book doesn't discourage home ownership, rather getting people to recognize that and to make sure your assets bring in more than your liabilities so you are truly financially free.

If you are referring to tax deductions for mortgage, property taxes, etc. on a schedule A, that is not what I meant. The LLC would have expenses of owning the house, mortgage, property tax payments, etc.

I, on my personal return would not have any deductions as I would be a renter. Also, the only benefit is IF someone was able to itemize. In addition, if the home is rented then there are less things that someone could come after me for. If I was going to relocate, I also wouldn't have to bother with either selling or moving it into an LLC later, I could just move and rent it out to someone else.

How would owning the LLC be the exact same as owning the house out right? Especially if I have partners or other owners in the LLC? As a non-single owner LLC the income would not be 100% flow-through, there would be a modest income "earned", and then draws at the passive level for the remaining part of what I would take out.

I am a new real estate investor, I have been reading every book, blog, you-tube video and forum  post I can absorb. The question is in Rich Dad, Robert states that owning your home is not an investment, but rather a liability. I got that, no issues. 

The question is, is it legal to "sell" or deed your home into a LLC and then rent it from the LLC? You could theoretically rent it to yourself cheaper than the mortgage and have a loss as a business, as long as there are other income producing properties to offset. I can potentially see a problem of mixing money if you were to deed a property to the LLC that you personally have a loan on? But why not try and lose the liability. This would effect net worth, but how damaging is that?

Thoughts?