All Forum Posts by: Maxwell Fontaine

That is now your tenant. Be kind and explain the changes to them. If that lease is not what your PM normally works with or what you are used to, that becomes your headache. 

New lease all day in my opinion. 

Hey @Joseph Nigro I am not an attorney I am just a normal investor. From a normal persons perspective it would seem to be whatever financially makes sense and security in combination. If you have to pay through the nose to have an LLC and think you can still cash flow at the end of the year if you bunch them together than do it. But if it financially doesn't make sense than you lose the benefits of cash flow and investing. The way I have mine structured is mirrored with my REI mentor which is a certain value limit. Each LLC holds no more than a number that you feel is a comfortable risk that if the sky starts to fall on you, your loss is potentially capped at that dollar amount in your portfolio.

The reason behind it is that you are still protecting yourself with the LLC and the veil. And the second benefit of limiting the number of LLCs you actually have is come tax time you wont pay as much to file for each LLC for each property. Sometimes people over look the tax bill.

Hopefully what I said helps even a little bit or sparks an idea. If you have any other questions please feel free to reach out. Best of luck to you.

An LLC I would recommend getting set up. That way within the LLC structure you will have the ownership percentages laid out and how to handle potential issues if someone wants out or how to vote on decisions not everyone agrees on. I'm not saying its the only way but it is a good place to start because it starts the "put everything on the table" discussions. I hope that helps some. Congrats on the decision to get started in investing.

I might have to agree with @Anthony Dooley here. It's just a shiny object that may not really provide anything more than to say you have it. The actual cost of them plus the headache the tenants likely will give plus the potential increased insurance cost per month is likely to make you very little ROI with exception of the long game maybe. I do not know if this would really be worth the move.

Be cautious when determining the ARV, try to communicate with some realtors that recently sold those properties and see if they can hint at the state of those properties. That way you can gauge their price to your potential price. If they sold fully renovated at a lower number you might need to get the house for a lower amount to get that cushion and make it more enticing. From personal experience it was very frustrating what a wholesaler would try to sell me high on an ARV and I often found they were not the best to work with... It is okay to shoot mid range to save your reputation in the long run.

You may want to be careful if that doesn't settle down in terms of the volcanic activity. I am no expert at volcano readings but i would imagine there are some signs that it could hit a tipping point where a small event may occur. The be careful isn't really for your property (although that is very important). I bring it up because you will absolutely see a spike in insurance cost after that regardless if the event is serious, That will increase the occupancy rate you need up much higher than the 50% you need now. If I were you I might keep an eye on it and check local insurance agents or companies and get some precautionary quotes every 3-4 months just to see a trend. If its level no harm done, if they are starting to go up...

Hey @Daniel Livermore, I agree with @Kyle J. definitely look up REIA meetings in your area instead and get some recommendations from them. That way you dont get bombarded with fake testimonials or ratings. You get real life stories and maybe some tips to maneuver around.

203K loans are great if its your first property. The good far out ways the potential negatives. There are 2 203 loans which is the 203B which is mostly cosmetic renovations not allowed to move any walls is really how they define it. Then the 203K which is much more in depth and larger rehabs like additions or rebuilding parts of the property. The contractor does in fact need to be approved but its based on the cost of the rehab. Its a very good product to use if you want to get your foot in the door. Remember you don't need to hit a home run on your first deal. If you eliminate your cost of living (rental expense) you are still essentially making that money every month anyway.

Also you get a Builders Risk Policy since you will be doing work on it. Heads up its more expense but really important. 

Just please keep in mind the cost to carry your insurance on that 8-plex. That is going to be your biggest variable outside of your P&I. Make you carry a commercial policy that gives you enough coverage for the entire property that, you may not need a lot of personal property but a high limit will be your best friend for something that size. The policy you get will change your numbers completely.