All Forum Posts by: Mathew Spray

Is the $1160 for both sides or just one? You mentioned house hack, so I would assume you plan to live on the other side of the duplex and rent the other side. In this case it would be 1160/115000 = 0.01 or 1% for just the one side. Also I believe most people use the 50% rule for maintenance, capEx, insurance, taxes, property management estimate. The other remaining half of the 50% is what is leftover for the loan payment and then profit. So in your case 1160/2=580-106=474-loan payment=profit. Again, if you are going to live on one side, use half your mortgage payment for just the one side. 

@Julie Torres, I second what @Costin I. is saying. That decision tree is awesome help. 

If you go under a DBA for your RE you are exposing both your business and RE to the same risks. If your business was sued your RE would be at risk and vice versa.

Since your original question was DBA or LLC, I would lean to forming a seperate LLC. Either way look for a commercial umbrella policy that can cover both LLCs (not sure if that is possible to be honest) or the LLC and DBA as one. Just incase there is overlap you can protect both with an extra layer of protection.

There is the option do neither too, but didnt want stray way from your original question. 

Lots of discussion on BP about forming an LLC or not. Since you are just starting out I would suggest waiting a bit long to establish an LLC. You will have difficulty finding lenders that will loan solely to a startup LLC that has no revenue whatsoever. There are ways around this; however it will come at a higher cost. Same for insurance.

Instead of an LLC get a $1-2MM personal umbrella insurance policy that covers "all risks". Once you build up your portfolio then move over to an LLC. Still keep you personal umbrella policy just as a backup to the LLC as any decent lawyer suing your LLC may find a way around the LLC and go after you directly. If you are truly serious about it you need to talk with a lawyer about specifics to starting up an LLC. Umbrella policies should cover legal fees too.

This is just my 2 cents, others will disagree. Ultimately it's your choice. There really is no right or wrong way with pros and cons for going down either path. 

Awesome, congrats! What area did you purchase in?

Under the Analysis tab for each property you can download the ledger for the current tenant which will list late payments. Also, I believe there is a summary on the analysis tab that gives a brief summary of when the lease was started, expires and the number of late payments as well as if the tenant is current or late with the most recent payment. You can also talk to one of their advisors for more details. This post is a year old, and roofstock has grown since then. Not all places listed on the site have a tenant in place any more; however, you can search properties that are vacant or occupied. I have not made a purchase through them yet myself. There are some other discussions and reviews on BP about roofstock.

My best advise (not just for real estate investment) would be for you to determine what "successful" means to you. Once you know what successful means for yourself, you will be able to build a plan and method to achieve success. Write your goal on paper and stick it on your bathroom mirror so you see it every day. Success could be simply owning 1 rental property that has positive cash flow by the end of 2020. To someone else success could mean attaining enough passive income or wealth to quite their day job or retire early. Endless ideas on what "successful" is. 

Once you have a goal, then list the steps out that you think you need to accomplish in order to reach success (these steps will most likely change as you learn more and move toward success). After that, focus solely and intensely on NIS (next important step). Heard/read NIS from someone else and it has been a game changer for me since I can get overwhelmed at times with a long list of things-to-do but nothing done yet. Once that one NIS task is complete, and only when it is complete, move on to the next NIS and repeat until you have accomplish "success". 

Start small and build on each of your successes. There will be mistakes and bad decisions along the way. Pick yourself up, learn from them and move forward with the new knowledge you have gained. 



 

The title, loan, bank account and everything else like insurance all need to be under your LLC and only your LLC (no insurance polices that list yourself and the LLC). If you have your personal name anywhere mixed in with your LLC you are leaving a door cracked open for your personal assets to be at risk, not just your LLC, should you be sued. If you used a lawyer to setup the LLC, talk with them about the risks of mixing your personal name with the LLC. Generally, if you cant move everything under your LLC, be sure to have a personal umbrella policy as a fallback in the rare chance if that was to happen. Lots of discussion about personal umbrella policies for amounts and coverage already on the forums. Talk with your insurance agent, explain your situation and what you want to be protected against should it happen.

Full disclaimer, I am not lawyer nor an insurance agent.

Ask yourself what is your goal for the rental property you currently have and what is your exit strategy? If the goal of the investment is being met then continue with the investment. If you do not have a goal, put some thought to making a goal and also how and when to exit from the investment. Me personally with the info you gave, I would lean to keep renting it out if you plan on keeping the rental for the long term. Otherwise you could take the 15K from the sale + 18K you would have spent on repairs and look for and new investment that is going to meet your goals. If you don't have 18K in your pocket or you would need to borrow money for the repairs, then that might change my decision a bit. Prioritize what needs to be done at the turn (carpet), and what can wait a bit longer (pool and roof) to spread out maintenance cost.