All Forum Posts by: Mark Bookhagen

LLC taxed as an S-corp to reduce self-employment taxes.

Solid strategy, and it probably will need injections from you and your partners though to actually grow as quick as you want it. Map out your cash flows and you'll see how long it takes to come up with that second down payment. It does grow exponentially though after your 2nd investment though (which is great). To answer your question, you can start taking money out when you are done growing and have an adequate reserve fund for unexpected and expected capital expenditures/operating funds. One more note: Odds are that at least 1 of the 3 of you will want to start pulling out money earlier than others so you'll need to agree on buyouts, etc. before you get started.

The deal above is about $100/mo positive cash flow. It has been my experience that duplexes are a better place to start than a SFR. They usually have better cash flow and lower risk. The lower risk comes because you will almost always have at least one tenant in the property to pay the monthly expenses.

This worked for me: Owner occupied multi-unit financed with low down payment FHA loan. If you do this and the numbers work, you will be able to save even more because you won't have to pay rent.

vistaprint is pretty reasonable

If you pull the money out using a conventional loan: 

You could pull out more than you need. Paying more interest. Pull HOW MUCH you need with HELOC.

You start paying interest on the loan on Day 1 even if you don't have something to buy. Pull WHEN you need with HELOC.

HELOC only downside is that the rate is variable. If you think rates are going to rise beyond what you're comfortable with, you can switch back to the conventional (and pay back the HELOC.)

Prorate if you think they will be a good fit for you. Quality people are worth waiting for.

Note: "When would you like to move?" should be a pre-screening question before you make a decision.

Not legal advice -

I put this clause in my leases for the reason you are describing: 
ASSIGNMENT & SUBLETTING

Tenant shall not assign this Lease nor sublet the premises or any part thereof without the prior written consent of the Landlord. Landlord may assign Lease at any time to any party without consent or notification.

So I personally am the landlord until I transfer the deed; then the lease is assigned to the new owner (the LLC).

Consult your lawyer to see if this is ok in MN.

Hi BP!

I'm looking for a NY MLS service. Does anyone have experience with http://www.nystatemls.com/ or have a recommendation for a small brokerage? Prices seem reasonable - $300/year/agent. Any help would be appreciated! I'm in Buffalo, NY. Thanks!

You already know or you wouldn't have asked.