All Forum Posts by: Jennifer Wilson

Hi @Jonathan Edmund! I am not entirely sure on the rental payments going to the original S Corp if the property is now in the new LLC's name. The only way I would think the IRS or an accountant would be ok with it, is if you can prove that the S Corp "owns" or is the signer, and therefore liable, for the LLC. I think it would be best to reach out to a CPA that is very familiar with real estate investing.

My husband and I have different LLCs for each of our multi-family properties.  If we had thought about putting our SFRs in LLCs when we purchased them, we definitely would have. But, now if we were to do it, not only would we have closing costs and title fees to pay, but the bank could call the loan due.

Now, we open a new LLC whenever we find a property and close in that LLC's name. If you haven't done so, I would recommend that maybe you find a local lender with a portfolio loan that won't sell it off. They are usually more lenient and possibly more willing to look at your whole financial situation vs. just the history of the LLC. For example, if they can take into account your personal income and credit (or income of the S Corp) as the signer for the LLC, plus what you plan on renting the property for vs. the mortgage, what you plan to do to improve the property, etc, then you might have more luck.

I hope this helps!

@Luke Carl If you are still looking for long term rentals in the Florida Panhandle, I hope I can be of assistance!  My husband and I have both single family and multi-family properties here in the panhandle and all of them are long term rentals.  I am an agent from Destin so my expertise is anywhere between Navarre and Miramar Beach, and up North to Crestview.  Due to our proximity to military bases, we have found this area to be a great place for long term rentals.

Since you are looking to get a 1% return, I think your best bet is to look for a home that may need updating and is located in FWB, Crestview, or possibly Navarre.  Those are generally the locations where you can get better bang for your buck.  I do believe there is a lot of untapped potential in Defuniak Springs as well, which is located on I-10 and about a 45 minute drive to the East side of Destin/Miramar Beach.  It is a smaller town so not a whole lot of inventory, but it may be worth looking into in order to get an even better deal!  I hope this helps!

@Catherine Hensley I am curious as to what you decided to do?  Are you planning on moving forward with a rental?  If so, where?

@Jessica Burrell  Raymond and Avery are correct. You can't finance a second home via conventional mortgage types if you are going to do short term rentals.  You'll likely have to put down 20-30% depending on the product. When calling around, ask lenders if they have a portfolio loan product for short term rentals.  The portfolio loan will stay in house with the lender and won't be sold off to Fannie or Freddie, so they have more flexibility in what they can and can't do. 

I will send you a message with a couple names of people I've heard of that do STR loans. Good luck!

Hi @Catherine Hensley,

I'm sorry to hear about the passing of your family member.  A similar situation happened to myself and my husband which is how we got our first rental property almost 5 years ago.  However, it also opened our eyes to the massive potential that real estate investing can provide.  Because of that, I agree with Matt and Sandy in that I'd recommend looking into a property that provides you with additional income vs. paying off your mortgage (unless you feel as though the value of your home is lower than what you owe).

Where my husband and I differ from a lot of other investors in the Destin market, is that we invest in long term rentals vs. short term rentals.  We do see the value in short term and know that you can make good money in it, but we don't feel that it is as stable as long term rentals.  Our current situation with COVID19 is a perfect example.  Short term rentals have been shut down for the last month during what would normally be a prime season and this situation was completely unforeseeable a couple month ago...  As a follow up, if you do think that a long term rental would be a good route for you, I'd recommend starting with a small home near you or in a location where you have someone you can trust to check on it/maintain it.  It'll make it less stressful than trying to handle something from hundreds of miles away.

You mentioned that you'd like some reading material. If you haven't read them yet, I would recommend "Rich Dad, Poor Dad" and "Cash Flow Quadrant", both by Robert Kiyosaki.  Cash Flow Quadrant might be a little more relevant as it shows the difference in how to earn money and how it affects your lifestyle, but it piggy backs off of Rich Dad, Poor Dad, so I'd recommend both!  Otherwise, I'm sure there are a lot of blogs and other questions on this site that would give you a faster answer with other people's experiences.

I wish you all the best and good luck!  

Jen

I agree with everyone to go ahead and replace it.  It is so much better to get it done before it starts causing damage to the interior of your home.  Plus, an added bonus is that it a capital expenditure that you can write off at the end of the year!

Hello!

A friend and fellow investor has recently reached out to me because she is looking at selling her long term rentals in the Fort Walton Beach and Crestview, FL area. Below are details on what she is looking to sell:

1. 2 Bed, 2.5 Bath, 1333 sq ft townhome in Shalimar. Two story with both bedrooms upstairs, tile downstairs, indoor laundry, W/D convey, one car garage. Built in 1984, current rent is $1200/mo. Lease ends next July. Asking ~$145k.
2. 2 Bed, 2.5 Bath, 1423 sq ft townhome in Shalimar. Two story with both bedrooms upstairs, updated cabinets in kitchen, indoor laundry, W/D convey, one car garage. Built in 1984, current rent is $1160. Lease ends next February and will likely renew.
3. 3 Bed, 2.5 Bath, 1564 sq ft townhome in Crestview. Two story, indoor laundry with W/D. HOA is ~$425/year. Built in 2007, current rent is $1045/mo and subdivision rents well. Very close to elementary school. Lease ends in January. Asking ~$110k.
4. 3 Bed, 2.5 Bath, 1564 sq ft townhome in Crestview. Two story, indoor laundry with W/D. HOA is ~$425/year. Built in 2007, current rent is $1050/mo and subdivision rents well. Very close to elementary school. Lease ends in May. Asking ~$110k.

All of these have been successful rentals over the last 2-4 years, the owner is just looking to sell because they're going to start flipping. I am unsure on the interior condition of these units, but there is likely the ability to update and build equity. With current tenants in place, you can start making money right away!

If you would like more information, photos, or numbers for any of these properties, let me know!

Have a great day!

@Leslie Shimasaki I understand where you're coming from in thinking that it will be easier to find deals yourself on the MLS rather than counting on someone else. It is likely that you'll search much harder and longer than any Realtor that you start working with, and I say that as a fellow Realtor! However, I completely agree with what @Marcus Auerbach said in that you could be hurting yourself more by not working with an experienced Realtor to start with. 

If you know you want your license for future use, go ahead and work to get it, but I would also recommend that maybe you work with an experienced Realtor who also has investment properties to help you analyze the first couple deals.  They could be a good mentor for you if you're just getting started, and will also be willing to help you out more if they know they'll be compensated for it as well.  If you have your license by the time you find something, maybe you could ask for a referral, but I'd recommend allowing them to represent you.

In regard to your questions about if everything is supposed to go through your broker... YES!  Everything needs to go through your Broker!  It's much better to pay a few bucks out to them now than face issues or a lawsuit later!  But, maybe you can negotiate the fee a little differently than their normal pay out if you do wholesale deals or lease option deals.  It would be worth a conversation!

I hope this helps, or at least gives you some ideas on how you can make money while still getting the best representation you can!  Good luck!

Hi @Account Closed

Here is a link to the City of Destin's website.  It has some of the rules listed, and at the bottom of the page, a zoning map.  I hope this helps!  Looking at the map, it does look like there's a couple areas North of 98 (The Palms of Destin, and maybe over off Calhoun) that qualify, but this map should be able to clarify things!  

https://www.cityofdestin.com/468/Residential-Renta...

Jen