All Forum Posts by: Max Malec

I too am looking at property managers in Hilton Head for my 2/2 condo. We plan on going live with bookings in June after the rehab is finished. My biggest fear with self-managing is screwing something up in the early months and receiving bad reviews right off the bat which is tough to come back from. 

Is there a typical commission for PMs on the island? 40% seems to be common across the country but since Hilton Head is so tourist/STR focused, I would imagine that competition would bring the commission down to 20%-25%. Has anyone found a good vacation PM on Hilton Head for ~20%?

@Christopher Brainard @Mary M. @Richard Sherman Thank you all very much for your insight. It is very helpful! I do not believe I need a S corp at this point but I was up until now unsure about the exact legal methods of transferring income to the parent LLC before writing myself a check from there. It seems that since it is all going on my personal tax forms anyway, the most important thing is keeping good records of everything. My CPA and attorney seem to be at odds on what to do, so perhaps it would be best to look for better team members... I appreciate all your help.

Hi BP, 

I am finishing up my second deal and my first deal as a serious investor. I purchased the house in cash and paid for the renovations out of pocket. At the direction of my CPA and attorney, I then created a single member Series LLC including one Master (umbrella) LLC holding a checking account but no other assets, and one sub-LLC owning the house and two bank accounts - 1) an Operating account in which the rent is collected and maintenance/property management fees are paid and 2) a Tax account that collects a monthly deposit from the Operating account to hold and pay for all taxes.

I plan to purchase other properties and create a new sub-series LLC under the Master LLC for each property.

My question is: how do I pay myself the net income from the rents into my personal account? Am I able to set up a recurring monthly transfer from the sub-LLC Operating account to my personal bank account as a type of salary? Should I pass the income from the sub-LLC into the Master LLC before paying it to myself (this may make sense once I have several LLC's all collecting rent so that my personal income would all come from one source)? If I have unspent money in the operating account quarterly/annually, can I pay that to myself as a bonus?

If anyone has experience paying yourself income from a single member LLC (ideally a Series LLC), I would be eager to hear your experience with best practices and things to avoid.

I am in the DFW area in Texas and I understand Series LLCs are not legal in every state and laws may differ, I am just interested in hearing how people pay themselves from their LLC. Thank you in advance!

Best, 

Max

@Account Closed yes, I have roughly $200k I would like to use on 3-4 properties and no debt. I was just wondering what banks would think of my controlling the day-to-day of the property and a parter only being passively involved past the mortgage signature with no real skin in the game. Thanks for your advice.

Marshall Leipprandt thanks for the reply. Yes, I have thought about using an FHA loan in a single family or to house hack a duplex-quad, and I may do this. However, even if I do this and put 3.5% down on, say, $200,000, I still have $193,000 that I would like to use to invest right away while I live there. Any additional deal I found after the FHA deal would still give me trouble with finding a lender. Has anyone experienced issues bringing a partner to cosign the mortgage while the other party supplies the funds? And a side question - what would be a fair split for someone only signing the loan and not supplying any capital? Thanks.

Hello all, 

I am a longtime reader and fairly new to action in the DFW market. I was recently downsized out of my job while in the midst of looking for a deal in the DFW market. I am looking to build a portfolio of single and multifamily homes surrounding Dallas but with the unfortunate timing of being let go before doing my first deal, I will have trouble getting a traditional bank loan. 

I have enough cash to buy a deal in the ~$200,000 range (as well as a small amount of regular dividend income) but would prefer not to use all my capital on one deal. If I were to do this, I would want to rehab then put a mortgage on the property after a seasoning period (essentially the BRRR strategy) but, even if I force appreciation and it cashflows, I am still worried about finding a traditional lender.

I thought I might use a partner to co-sign a traditional mortgage with 20%-25% down and that way I could do several deals with conventional financing using my saved capital. What might banks think about offering an investment loan to two partners, one with decent steady income who just signs the mortgage and one who supplies the down payment? 

Any help and ideas are greatly appreciated!