All Forum Posts by: Matt K.

Aren't property taxes high in TX and would be even higher in a quickly appreciating market? Appreciation to make only makes sense if you have a plan to use it on something else...but that most likely requires taking on more debt.  More debt can be harder to manage both finicaly and or emotionally...

Cashflow is great, but like others said it is a lot slower.... And can be wiped out rather quickly with some bad luck and or bad tenants.

Also, military is never guaranteed rent. Lot of protections on military side and it's easy for them to break a lease. Yes, you can go after them through their chain of command but trust me....there's plenty of military members who are not good with money or wouldn't make good tenants. While they deserve your respect, don't assume they'll be the perfect tenant and definitely don't think it's guarnted rent.

You should create a plan and find a property that is best for you and it'll likely have a balance of cashflow and appreciation. But to get the best, you have to define what best is before you start. The definition should be more then numbers you plug into a spreadsheet...

You have to define what best means to you, anywhere can work...but anywhere isn't always best.

The easiest way for me was to start with a budget and then find a market that fit my needs but also my restraints (budget). From there I defined what type of tenant I was looking to provide service to and then from there properties that are the best for that specific role.

To give you a more specific example, I had a smaller budget (say 130/door max) and was looking to appeal towards a family with school aged children.  KC area fits the budget, then from there I picked an area of the suburbs with good schools. Then from there I found a duplex in a quiet neighborhood (cul-de-sac) that was on the bus line for a good local school.

Now the duplex is a 3/2 with 2 car garage. It doesn't have a yard, but does have a pool etc ...all exterior maintenance managed by HOA same with snow and garbage. The fee is small for that and I capture it in the rent.

is this the best deal? For me yes, someone else no... But I did get a long term family that wants to stay for the remainder of their kids schools years ...so it worked out well for me/them.

All that makes sense, my question was specific to title in LLC and note in personal name. Just curious how one could explain the separation between LLC and person when the note isn't held by LLC (even though paid by LLC)

Side note, you ever thought about primary home in a trust? I've been looking at that once I get a refi done.

Also, I should add I understand there's millions of way to accomplish these things and it's more then likely going to be case by case unique to the person/situation. But, I feel at same time some items can be discussed on a broader sense as best practice etc (like how you've set up/manage the LLCs).

How would you defend keeping title in LLC and note under personal name...

It seem like that would be interpreted as commingling and thus peirce the veil.

 Just out curiosity how would you defend that from claiming it's commingled funds/assets ?  By no means am I saying this wouldn't work, just curious of the defense.

It's not that hard to pierce the veil of a LLC at which point all your protection goes out the window...

https://www.nolo.com/legal-enc...

the biggest hang up for me is the people that take out a mortgage in their name then transfer to the LLC. Seems like an tough question and most answers aren't going to help in a lawsuit when you'd actually need the protection.

For now and with everything there's always exemptions... But there's been major pushes in other cities to get rid of some those items.

Plus they only work as well as the previous landlord uses them, which isn't much these days. Cash for keys is common and would never show up for example. A desperate landlord would likely say nearly anything to shift a problem tenant elsewhere...

It makes little sense to me to pay off my primary even if I had the money to do so. Loans are so cheap right now I could rather easily and consistently at a minimum match my interest rate at pretty low risk and probably beat it.

Plus, being my primary if I for some reason needed the cash I'd either have to finance it or sell it to access that cash. If the later, it'd no longer be my primary... On the flip side if the funds were elsewhere I could sell off whatever they were in and still maintain my primary and likely cover the debt for many years as worse case.

With that said, also not a firm believer in high LTV to allow for swings on value...

What about a office or shared office/virtual office. I believe some of those have mail handling, aren't a PO Box, qualify as street address?

But LLC probably a better move....

What kind of property is this, I imagine you'll get quite a bit of pushback asking for tax returns on a rentals. I was a renter for probably close to 15 years and I've only been asked once for tax returns. The landlord was crazy and I could tell right away it wasn't a good fit and walked....

2 concurrent mo of statements and then if you really wanted pick a random mo. You'd be able to see deposits/withdrawals that don't make sense when matched up to a credit report.

Its easy to get fake pay stubs, less easy to make everything align month after month ....