All Forum Posts by: Kyle Shankin

Thanks @Joe Splitrock. I had heard that there are fees involved and I'm aware that a broker has to hold your license. It sounds like I'd be looking for one of those brokerages who just require an office fee. Depending on the fee amount, it might still make sense to do if that helps me land more deals.

Thanks @Joe Sadusky, I appreciate the insight!

There are many posts and have heard several guests on the BP podcast advocate for getting your real estate license, but no one ever talks about the downsides.

I'm a southeast Michigan-based investor who is using direct mail and PPC marketing to find new leads. I'm considering getting my license solely so that I can more accurately comp out houses and make better offers and maybe be able to view houses on the MLS on my own schedule. I don't have any interest in starting a career as a real estate agent as I already have a job (though the plan is to go full time into investing when appropriate).

How would getting my license negatively affect what I'm doing currently?

In my opinion, Incorporating at any capacity is a good thing @Kevin Cooper.

Hi @Kevin Cooper. I happen to be researching the same exact thing. I don't have a direct answer for you, but I can stir the pot with what I've seen so far (I haven't actually executed anything yet).

I had an initial consultation with an out of state lawyer who recommended that I form an LLC in Wyoming and have it be the controlling member of my Michigan LLC. As in your case, this was recommended to control/set/protect the charging order. I have an immediate family member who is a (non-real estate) lawyer and I asked her about this. She seemed puzzled and, after a quick disclaimer, said that it seemed like an odd and unnecessarily complicated thing to do, because "The corporate veil in Michigan is already difficult to pierce.".

Funnily enough, we happen to have another family member who works at a title company. I had told this family member about my initial consultation and she told me that she has a real estate investor client who has dozens of properties under a Wyoming LLC. I told my lawyer relative about this, and she said that she would look into it for me.

And that's where I'm at currently!

It seems odd to me that a company would have a hard time finding a loan if they're from out of state. If the deal is good and the company's financials are on order, I wouldn't think that that would matter too much. Of course I'm just speculating.

I look forward to hearing what other folks have to say!

Hello @Kyle Ostrander, welcome to the forums!!! I agree with Jake, local is usually the way to go on your first deal because you know the area. Since Alpena is smaller, you'll want to put extra effort into making sure that there's enough rental demand and that you get a great deal.

Hi @Jessica Peng, welcome to the forum! 

It's difficult to single out one reason why real estate is better.  Yours is a subjective question, but I do have an opinion. I dabbled with selling on Amazon, what I didn't like about that is the task of finding a niche product that has a high enough margin to cover losses while fighting with the competition. You can put a ton of work into finding a profitable niche only to have somebody also discover that niche and start undercutting your prices. 

One of the things that I like about real estate is that it's virtually recession-proof. People will always need a place to live, but they may not always need whimsical adult onesies. 

Really take my advice with a grain of salt as everyone's outlook is different. One thing I can tell you with absolute certainty is that both routes will require a LOT of hard work for a long time. 

Hi @Adam Peacock.

My opinion is that you would not be fully leveraging your money by leaving it all in one house.

There are a few things to consider with your example, but I think that the second scenario is better. A common goal of most investors is to find properties that appreciate in value, so let's say all of the houses in your example appreciate 3% in one year. In the scenario where you leave all of your cash in the house, you now have an additional $3,000 in equity. However, having 5 houses will leave you with an additional $15,000 in equity. If you were to compound that number over 5 years or so, your first house has is now up to almost $16,000 in equity from where you started. However, if you went the other route, you have 5 houses that appreciated to almost $16,000 in additional equity, then you've added almost $80,000 equity; the more equity you have, the more buying power/options you have.  

One other thing that stands out to me is your comment about cash not flowing to the investment. I wouldn't phrase like that because it sounds like cash is flowing to the lender and not you, but that's not the case. After all, your net cash flow is $1,250 no matter which route you go in this example.

@Cory Peters Hard money comes to mind. Quick disclosure, I haven't used a hard money lender yet. But I hear that you can get quick cash, often enough to fund the purchase and rehab. You'll need to put some money down, but it's often (from what I've heard) less than a standard 20% loan.

Hi @Grant Finley. Yes, I think those are good indicators of growth as well as stability in the context of an "eye test". Hospitals are another one that I like to look out for.