All Forum Posts by: Jon Reed

Got to three local banks and talk to them and ask them these questions. They will help you.

I am not lawyer... but I just gave "CAL CIV Code 1714" and it sure seems to talk about the rights of people who serve alcohol at events... nothing to do with landlords providing security. 

It sounds to me like you have some tenants who think that they can Google themselves out of paying $3 extra dollars a month. I would just make it optional then, they do not have to pay the $3 per month but they will also not have access to the Ring.

You are the buyer... no reason not to use your own agent when buying on-market deals (since the seller pays commission costs). 

Sounds like you need to talk to a lawyer who is knowledgeable in your local/state laws.

Also, be sure to weigh out the ROI of going after a tenant for back due rent. The majority of the cases you will spend more money on lawyer fees, court costs, and sheriff service fees than you will get back in rent (especially if you give value to your time that you invest into the entire process).

Make good business decisions, not emotional decisions. 

Not sure what all you are talking about so lets walk through your questions with more questions.

• What type of property are you buying? why are you buying it?
• Are you wanting to buy it in your own name on the title and then transfer to the LLC or are you wanting to actually add the LLC to a conventional loan note which is only in your name? If so why?
• Does your mortgage note state that a business can't be ran out from the property? Have you asked your lender?

Just a few questions to start off with to get some clarity to what you are asking.

Congrats on the appreciation! The one word that stood out in this post is "emotionally invested". Investing in real estate is about making decision with the best long term results for yourself and if you start making emotional decisions then you will not be doing what is best for your business. 

I would sell your personal home and take all of that appreciation and cash out on it. Since it is your primary home you will be able to get every penny of that money tax free. If you use it as a rental then after a few years you will not longer be able to sell it without paying capital gains on the appreciation. Then once you have the cash look for a property that is a good financial investment and not an emotional investment. There is a lot you can do in real estate if you had $100-200K of cash to start with.

It all depends on the numbers you run. There are so many moving parts that could affect which one of those is the best decision that no one could give you a helpful opinion without knowing the details. Sit down for a few hours and run the numbers on every single options and find out which ones provides the best ROI for you and then do that one.

If you do not have enough money for a down payment then I would first look hard at your personal finances. Before purchasing real estate you need to have cash reserves. For each of my properties I keep in reserves enough to cover 3-5 months of mortgage payments and then an additional $3,000-$5,000 to cover major damages. 

Don't let the idea of 'no/low money down' mean that you don't need cash to purchase real estate. You will need either to save up cash yourself, partner with someone who has cash, or build a good relationship with some private/hard money lenders.

If you have bad credit then you should first focus on improving your credit score and creating good financial habits. Then you need to get with your neighbor and a title company to figure out the issue with your property. No bank is going to lend on a property that has land ownership issues because if you default on the loan and they end up with the property then they will be the ones who have to fix it before they can sell it.

I am a HUGE advocate for having all investment properties under and LLC and not under your personal name for many reasons...

1. Your personal credit score will not be impacted by commercial notes vs a personal mortgage you will have to show proof of rental income and history if you ever wanted to get a personal loan for a car or a personal mortgage to show proof that those personal mortgages are actually investment properties.

2. Liability protection... having them in an LLC just adds one more layer of difficulty if someone tried to sue you.

3. Remaining a bit more anonymous... I don't want people to know how many properties I have. If they are in an LLC then it just adds one more layer to make it more difficult for someone to know how much real estate I own. Think of it if you get in a fender bender and it is your fault... if they get a sketchy lawyer they will look up to see how much assets you have to see how much they come after you for. If they are in an well structured LLC then it will make it more difficult and hopefully make it just a little bit more unappealing for some sketchy lawyer to come after me.

4. No cap on number of size of loan you can get with an LLC vs. personal mortgage

5. It is just a good practice!

Bonus Comment! I also recommend getting an umbrella policy for you personally and also an LLC. If a lawyer is able to pierce your LLC vail then you will have another layer of protection of your personal assets.