All Forum Posts by: Kris V.

@Bruce Runn @John Woodrich Thanks for the clarifications! @Travis Sperr That is a great idea to have the same joint account as assets for diff loans. 

@Dan Bryskin Thank you for sharing your unique solution to this. I am going to research this further...but I have to remind myself that I have bigger fish to fry than to worry about these things:)

@Marc Jolicoeur Good to see you buddy! Great questions thanks for asking!

@John Woodrich I will talk to the bankers about transferring ownership as well. 

@John Woodrich Thanks for the feebcak! Yes a newbie but dont want to look back years from now and say wish I structured the loans differently, so are you saying it does not matter if you buy jointly or not the same limitations apply or are you saying buy in my name run up to 10 and switch to my wifes name then buy 10 more?

@Bruce Runn Thanks for chiming in! Can you please elaborate "your understanding of buying in your name with some and under your wife's name is not exactly correct either"

@Travis Sperr

@Travis Sperr Thanks for the feedback. 

Thanks for your input @Jeff B. 25 year ARM wow! I assumed loans to LLC/entity vs individual would have higher points, closing fees/higher rates but did not expect rates to reset every 5 years!

Hello BP!

Full disclosure - Newbie investor trying to find the best combination of asset protection and lending terms.

I have been talking to a few lenders in the Minneapolis, Minnesota area to line up my finances before I buy my first Buy and Hold property (end of Summer /early Fall). What I have been finding is that lenders will do loans in LLC names but they are commercial loans. 25 year loan term, 5 year reset/balloon. So far I have talked to 4 different lenders and everyone says the same thing.

What I assumed(perhaps a wrong one!) is that I could have 30 year fixed mortgage in a LLC name as long as I backup the loan in my personal name.

The reason for LLC was asset protection, but with 5 year resets and being at the mercy of a lender to hike the rate that is too much of a risk that I am not willing to take, not to mention the higher rates and closing fees associated (especially for buy and hold long term rentals + in the fed's decision to start raising rates).

So, to summarize here are the two options that I can come up with

Option 1 - If you want asset protection you can buy in an LLC(for each property) BUT can only get commercial loans that reset every 5/10 years with 20-25 year loan term.

Option 2 - Buy in your name, get 30 year fixed mortgages. Load up on Liability insurance.

Here are my questions

1. What other options exist?
2. If you go with Option 2(in your name), would the bank stop at 10 properties?
3. How do you go beyond 10 or 4 properties? Go to Option 1(Commercial /Portfolio loans with balloon resets)?
4. If you go with Option 2, would I better to buy properties in my name first max that out and then start to buy properties in my wife's name (as we both have W2 incomes and will keep the full time jobs). 
5. Option 2, I would not start buying properties as Joint Owners?

Look forward to the feedback from the community!

Thank you all for the encouraging words! 

@Michael Lee - Thank you for those great pointers especially about attorneys, trust but verify and have the numbers right!

@Steve Anderson - I have started to run mock numbers and what you say about math will tell you about the decision is spot on! Initially I was just running numbers without gaining any insight but eventually I started to see why experienced folks say run numbers on 100s of deals as you are getting started. Not sure if you attend any local REI meetings but would love to connect with you in those meetings.

Hello!

I am Kris, currently live in Eden Prairie, Minnesota. Have been working in Technology for the past 14 years and love what I do and wish to continue my full time employment. Have been looking at real estate as something to grow wealth, gain passive income and also diversify from paper assets/Wall Street.

For the past year or so, I have researched a ton, read a lot of books( still reading) , I think I must have heard all the podcasts there are :). What an awesome resource BP is! I have also started to save and I am about 75% there for capital required for my first deal. In the next 3 months I will reach my goal for capital needed. Picked Single Family Residential Buy and Hold as my investing strategy. Initially want to buy properties with enough reserves + 25% down, I will loosen this up once I get comfortable but that is what I am shooting for right away. Would like to buy the first property that is rent ready in 2017(Fall ish) and grow/acquire properties every year from there.

Primarily looking at the suburbs of Minneapolis and St Paul, Minnesota(fine tuning the area to a few suburbs as we speak!). Once I am done with couple of deals, I will venture into little bit of rehab and make them rent ready. I will be hiring property management starting with the first property, primarily die to the limited time I can allocate with my full time employment.

I have started to attend the local REI meetings on Meetup(BP, Affluence in REI, TCRE), MNREIA and have met a few fantastic folks. Looking for folks who are experienced and are willing to meet over coffee or lunch to share their wisdom of course I will be buying :). Along with this, I am also looking for investor friendly Realtors, Property Managers, Lenders and attorneys!

Looking forward to connect with local investors/realtors/lenders/PMs and learn and contribute to this awesome community!

Kris

I am newbie investor from Eden Prairie as well...lot of insightful comments, as you are comparing the cons about investing in Town Homes, I think that this is one pro about depreciation regarding town homes. 

Compared to SFRs...town homes have a lesser % of land value AKA you can depreciate the building at a higher percentage compared to SFR.