All Forum Posts by: Lucas Miles

@Eric Anderson welcome to BP, I'm investing in southern Minnesota, would love to get a VRBO in Alexandria area eventually for cash flow as well as personal vacation use. Been vacationing to the area since I was a kid. Feel free to reach out, always love talking real estate!

@Austin V Nguyen good for you to be thinking ahead at your age and while in school. I wish I would of bought a house and lived and rented it while I was in college! Find a decent property in a good neighborhood close to campus you won't regret it!

@Chad Maschke welcome to BP! Great site to learn and connect with fellow investors. Depending on your situation "house hacking" is a great way to get started if your looking to get into rentals. Buy a small multi family, live in one unit rent out the rest. You can get a FHA loan for only 3.5% down, and u generally only have to live in it for about a year.

If your looking for more active investing, wholesaling or flipping people have success with. Flipping is probably more risky if you don't know what your doing. Finding below market properties is really key!

@Tyler Smith welcome to BP, great way to learn and connect with fellows investors. I'm located in Fairmont MN (on I-90 little under 2 hours away). Just getting going with my investing as well. House hacking is a great way to get started with real estate! I'd love to connect and shoot some ideas around, Rochester is a very intriguing market for cash flow and long term appreciation.

@Jacob Temple in rural areas you will generally not get the appreciation, but probably better cash flow. In smaller towns generally less rental regulations (at least from an enforcing standpoint) so lot of time a lot of smaller "mom and pop" type investors who are less experienced investors and at managing tenants. Lot of opportunities to find value add cash flowing properties, but harder to scale quickly in a small town if that's your goal.

@Keegan Darby I prefer longer generally one year leases. Shorter 6 or 9 month only to line up the end of the lease term in the summer months when most tenants are moving.

Month to month gives opportunity for higher turnover, lower turnover the better. If you can find high quality tenants through referalls and effective screening then your better off keeping them as long as u can.

@Anthony Morvillo always know your "why" and understand real estate (rentals especially) is a long term play. Expect and plan for issues to come up, develop processes and systems to deal with these issues. I've lost a lot of sleep myself, but always have the long term vision in mind which helps get through the late nights!

@James Hamling thanks for this information, I'm less concerned with providing my personal address to municipalities as this information shouldn't easily accessible by anyone. My concerns are from an asset protection standpoint, and to separate the "tenant interaction" face of the business with the passive ownership. I think I'll reach out to my attorney for a final recommendation if this is acceptable or not. 

@Amber Gonion thank you, my registered agent does have a real address so should be good there. 

@Stephen Jackson I would be very cautious about this strategy. I'm not sure if a bank would go for this type of funding strategy. If you don't have enough capital to put down I would make sure you still have enough in the event that the HVAC goes out, or you have to evict tenants and don't have rent for a few months, etc. 6-12% is a lot of money your paying in interest, even if the numbers do work out. Maybe try reaching out to a local investor and see if he/she would be willing to partner if its a great deal.

Not sure you're living situation, but if you could do owner occupying with a FHA loan you would only need 3.5% down payment. You would have to live in one of the units (I'm assuming its a multifamily) for I think its a year or so to qualify for this type of loan.

Another option to consider would be seller financing. The seller is basically the bank, and you pay the seller in monthly installments (with interest) for say 5 years, and then after 5 years you would pay the seller the rest due (you would refinance with the bank at this point to pay the seller off). Could be a way to get the property with less down. Benefits for the seller are: 1) Still get monthly checks without dealing with tenants. 2) They are earning interest. 3) Tax benefits by spreading out the payments

@Brian Edwards the benefits of using an LLC is for asset protection, and not generally tax benefits.

If you have a property owed by an LLC it should separate your personal assets from whatever the LLC owns (in this case the property). For example, if you get into a car accident and lose the lawsuit, a properly formed and operated LLC would prevent creditors from going after the property owned by your LLC. Similarly if your LLC gets sued, they shouldn't be able to come after your personal assets (personal savings, car, etc).

Forming a LLC vs not is basically comes down to how much you could lose and your risk tolerance. With house hacking your risk of getting sued is probably lower as your have more control over your properties as your also living in them.

The downsides to forming an LLC is the cost to create it and the added complexity it brings to operate it (separate bank accounts). Since you only have 3% invested it may not be worth it at this point, but something to consider as you grow and gain more equity in your properties.