All Forum Posts by: Marina Draper

Hi Logan,

Just out of curiosity - what did you decide to do after your calculations?

@Sungpil Lee Based on what you wrote, I would recommend you to go with whatever gives you the lowest rate, which will probably be a home equity loan. Plus, it is a fixed fee, so you are insured from the promised rates hiking up. 

Shop around and see which bank gives you the lowest rate, I would start with small local banks and Credit Unions. 

There are several more questions that just popped in my head for taking this decision:

1. Are you planning to do other deals in the nearest future? 
2. Is this loan going to be long-term or short-term? 
3. Is your cash-flow allowing you to pay interest only, or principal and interest on your mortgage? 
4. Is your second mortgage lender going to be OK that you are putting borrowed funds as a down payment or do you have the same amount or bigger in cash on your bank account?

I absolutely agree with @Dan K. - a good zoning attorney will be much more helpful than a contractor's advice.

I still recommend you to look for a contractor beforehand - good contractors are booked way in advance! Start getting bids as soon as you're under agreement!

Hi Cliff,

Congratulations on starting out your path of real Estate! It must be very exciting!

I recommend to find an attorney in California who can help you with those questions and will guide you through the process. However, the actual process of registering an LLC is not very complicated, so try to not go too far with the legal fees when you are just starting out.

Here is my opinion based on the experience I had with forming an LLC. It is not a professional advise though, as only an attorney can give you one.

1. Do I need to form the LLC in CA or PA? - I believe it doesn't matter where you form an LLC, you will need to be registered in both states though.

2. Are you going to be getting financing under your LLC? Is your lender on the same page with you about it? If yes, then it's easier to transfer funds to your business account and then pay from the bank account of your LLC.

3. Yes, opening a business checking account is very simple, after you form an LLC and get an EIN, call your bank before going and tell them you need to open a business checking account. They will tell you everything you need to have with you when you go. I recommend to find a free checking account with free online banking tools and good customer service.

I don't know if you already went through that thought process, but are you sure you need to form an LLC for your first buy? I just wanted to warn you about accounting, tax and legal costs of owning and LLC, especially in CA they are quite high. Minimal annual tax in CA is $800 + CPA fees to file the tax return + fees to form and dissolve an LLC when needed. Just wanted you to make sure that's what you want before you commit to it.

The safest ways of investing I heard of would be the savings accounts, CD's, money-market funds, Federal notes. They don't get much of return, but if your goal is to minimize risks and wait for a correction to get riskier investments, that would be the way to go.

Hi Daniel,

Starting out is tough, but it's much easier with the help of others who are more experienced, that's for sure! I am confident you will get a lot of help from Bigger Pockets community and a lot of advise on your calculations. There is a whole topic on this forum called "Real Estate Analysis and Advise" where you can freely post your deals and get a lot of help!

Another thing I'd advise would be to meet some local real estate investors in your area and talk more with them, maybe even partner on a deal together, once you know you can trust this person.

You're in the right place for help! Good luck!

Hi Travis,

For a start, I think it's a great idea to start with refinancing your primary residence! 

Other options include:

• retirements accounts
• private lenders (like your friends and family)
• personal loans

But refinance would be my first bet as well. Shop around for better terms that work for you and go for it!

Which type of lending are you planning to get for the fixer property?

Hi Ross,

There are plenty of ways to get financing, there is so much information about it on Bigger Pockets! I am sure if the numbers make sense, then you can come up with financing one way or another, it's a question of what terms the financing will be on, as you don't want interest to eat in your profits. In case of a regular construction loan, I am pretty sure you will have to come up with 20-25% down payment. Are you planning to finance down payment with private lender financing? Or are you doing an FHA?

I advice you to make a detailed analysis of the deal in a presentable form, call the banks and shop around. If it is a good deal and you present it professionally to the bank, you should be able to get financing.

Hi Ian,

From what I see in Boston area - it is possible, but not in prime neighborhoods, more in run-down neighborhoods with properties that need extensive rehab. Many investors buy into them with the plans for appreciation, as gentrification is happening over there. It needs to be a 3+ unit building though, most duplexes don't even out. 

It's tough to find good deals in these markets, so you should get creative about it. Good deals sell before they even get on MLS. Look for wholesale deals or off-market deals.

Good luck!