All Forum Posts by: Jon Reed

Buy the book on BRRRR... read it... then just go out and do it.

1st... You should talk to a lawyer... I am not one

2nd... Just file for a standard LLC. You do not need anything fancy or worry about how many different LLCs you need for enough protection. You are just buying your first BRRRR deal, you just need to work with a lawyer and put together a single LLC. Most lawyers will help you correctly create an LLC for $300-$800.

Just remember that for every LLC you have you need to treat them as completely different businesses. Each rent has to be deposited into different accounts created under each LLC. Then each mortgage has to be paid out from the correct account. As soon as you start crossing money between accounts or using one LLC to pay the mortgage of another then you pierced any protection you had.

$5K isn't really enough to dive into your first property. That is a good start on a cash reserve to have for when you do start investing in real estate. 

If you are not looking to save it and build up reserve for when you do buy a property... then I would talk to agents in your area and see what marketing work's best for your area. Hopefully that will grow your income as an agent which will then get you closure to investing in real estate. 

There are hundreds of different ways to start out. But you are doing the first step by reaching out for help!

Pricing, area, single family vs multifamily... so many options. I would start with making your own personal budget. Outline how much money you are bringing in each month, minus all your expenses, then see how much you have left over. Your next steps will look very different if you have $5k extra each month verse $10 extra each month.

I would stay away from a home which was seriously damaged by fire. It is one thing if it was just a kitchen fire but if the entire house was hosed down by the fire department then you are better off bulldozing it and rebuilding. 

Also.. for your first BRRRR deal... I would recommend something a little smaller than a full gut (unless you have plenty of rehab experience already).

BRRRR... that is the best strategy of getting into a property without having to pay 20% down. If you don't want to go that route then start looking for cheaper properties to purchase (and if you say that isn't possible in your area then start looking in different areas, cities, or states).

With 25K... I would look at buying a 4 plex and living in one of the units. Get a FHA loan and make sure you keep $5-10K in reserves to cover any unforeseen issues.

You do not want to rent to a tenant who can not come up with a deposit and 1st months rent before moving in. If they are that bad at managing money then they will most likely always pay late and end up ruining the cash flow of your property. 

Just grab the first one you find from a google search and then start customizing it as you walk through your first deal. There is no "complete" list out there that will work for you.

I would create a new LLC for each property that you are partnering up with someone else on. Then each of you can be % owners of the LLC. That way you can create an operating agreement which will outline how to handle all the bad junk that will come your way during a partnership (not bashing partnerships but get everything in writing on how to handle the bad situations to come before they actually happen).