All Forum Posts by: Lumi Ispas

@Elia Ziliani , congratulations! Your English is amazing. I will Message you the info of a friend of mine from Miami that's an awesome realtor!

@Phillip Ballard , the great news is that as a first-time buyer you can either buy a building with a 3.5% down FHA loan, or if you make under 79K, you can take a conventional loan, 5% down.

With an FHA loan, the down payment can be gifted by family or use retirement accounts to fund the deal.

In both cases you could ask the seller to pay your closing cost to preserve your cash reserves.

@Phillip Ballard , Congratulations on jumping in! You've already done the first step if you bought the book and reading it. 

House hacking will be more advantageous for you, as when you rent one or more units, not only you get money that covers or go towards paying your mortgage payment, you also get to depreciate the % of the building that's rented, and your tax deductions increase dramatically. To give you an idea, if you make close to six-figure and you buy a 500K property with 3-4 rental units, you can save in income tax 5-8K per year. 

As you noticed there are a lot of "ifs" there as the amount of tax savings depends on your income, the number of units you rent, the building purchase price and the cash flow. I am not an accountant, and you will have to contact a cpa to look at your exact situation and share how much you'll save in your situation.

Overall most of times you'll be in a better place financially when you buy a building versus a house.

@Mateusz Skiba , congratulations on your decision! It is awesome. My youngest buyer is a 20-year-old girl that bought a four-unit before her birthday also, and she got a unit to live for free and a few hundred left over every month after she did a 203K FHA. You will go places!

@Brian Woods , of course. Sent!

@Sam H. , I just PM you with the info of a great contractor.

Hi @Steven Meyers , I am on two condo boards and both my Management companies are awesome. PM me and I will send you their info!

@Ian Livaich , great questions. I advise you though to start looking at properties first. If you plan to finance them, talk to your lender and see if they allow you to buy in an LLC.

As you are at the beginning, you might be starting smaller, with a residential property, meaning, most of the time you won't be able to finance in an LLC. If you do start with a commercial property, and the lender is okay with the LLC, then when you write the offer, just write it in your name, or/and assignee and just open up an LLC after you got your offer accepted and close in that company.

There is no benefit to have opened the LLC earlier unless you buy for cash an REO property which requires that you don't change the name of the buyer.

All the answers above from @Omar Khan , @Steve Vaughan and @Eve Mahoney are great answers. 

Registering your company in Delaware might not be as helpful as you think.

After you buy your first property, reevaluate your goals and financials and sit down with an attorney to plan the way to buy the next properties.

I will say focus on taking action first and make sure you don't get into analysis paralysis which I see quite often. 

Resolve what type of property you want to buy, and start looking and writing offers!

@John Suess , Congratulations on starting investing at your age. With such a start, you'll be financially set before you reach your 30s!

If in your area there are 3 and 4 unit buildings, buy the most you can buy with a low downpayment. Usually, as an owner occupant, you can buy up to 4 units with only 3.5% FHA loan or 5% conventional loan. You have to learn to calculate the cost and income. You want to buy a building, where the difference between all the income from rents and all expenses give you a good cash flow. Most people are looking at house hacking, meaning has the income from 3 out of 4, or 2 out of 3 units cover all expenses and get one rent as positive cash flow.

Keep in mind you will have to be employed to be able to take a loan unless your parents or a partner will cosign for you.

Hope that makes sense! Good luck to you!

@Eric Telese , you want to have a very specific goal. Are you looking only at cash flow, and what type of markets: A, B or C? 

An A and B market would grow in value a lot, therefore you'll get a lot more equity, a C neighborhood will have the best cash flow, however, the management will be more expensive and more time consuming and less equity growth. 

I will say get clear on your goals, and then it will be easier to narrow the markets!

I love Chicago of course, as I know it best, however, for you, it has to be a place where you want to go to visit once in a while and a city with enough inventory and turn over to get good tenants and price increases.

Good luck to you!