All Forum Posts by: Melissa Justice

Hey @Victor Mercado,

Welcome to real estate investing! Great question — and it's good that you're thinking carefully about your asset protection and structure. Here's a breakdown of the LLC vs REIT per property strategy you're being offered:
Strategy: 1 Holding LLC + 1 REIT per Property
Pros:
- A REIT (Real Estate Investment Trust) structure can offer tax advantages if set up properly.
- May make it easier to raise outside capital for individual deals.
- Could offer more flexibility for large-scale scaling or syndication.

Cons:
- Complex and expensive to set up and maintain — REITs require legal compliance, strict IRS rules, and often SEC filings if they’re public or large enough.
- Not typical for small or residential investors — this structure is usually used by institutional investors or very large portfolios.
- May not make sense if you're just starting or only holding a few properties.
___
More Traditional Approach: One LLC per Property
Pros:
- Clean and simple structure — each property is isolated legally and financially.
- Common for small-to-mid-size investors; easy to understand.
- Lower startup and legal costs, easier bookkeeping.

Cons:
- Can still get costly if you own many properties (LLC fees, registered agent costs, etc.).
- Not as investor-friendly if you ever want to syndicate or bring in partners.

 Suggested Alternative for Beginners:
- Start with 1 LLC holding 1–3 properties (if they're low risk and low equity).
- As your portfolio grows, consider a series LLC (in some states) or a holding company LLC structure with subs under it.
- REITs are better saved for when you’re raising capital at scale or building a fund.

Bottom line - A REIT-per-property strategy sounds like overkill unless you're already working at a large scale. You'll likely be better off with a standard LLC structure, especially if you're just starting and focused on buy-and-hold or flips.

Let me know if you need a good company to set up the LLC.

Best of luck!

Melissa Justice

Investment Strategist at Rent to Retirement

Hey @Griffin Madsen,

That’s awesome — love seeing young investors getting into the game early! South Florida is a competitive but opportunity-rich market, especially if you’re willing to network, stay consistent, and learn fast.

My advice:

Pick a strategy (wholesaling, house hacking, short/mid-term rentals, etc.) and go all in.

Leverage meetups and investor groups — there are a ton of local real estate events in Miami, Broward, and Palm Beach.

Start driving for dollars or partnering with experienced wholesalers or agents who know how to find off-market deals.

Don’t wait for “perfect.” Take messy action and learn as you go!

If you ever want to connect, share ideas, or analyze a deal together, I’m down. Real estate is a team sport!

Best of luck,

Melissa Justice

Investment Strategist at Rent to Retirement

Hey @Trey Cullison,

That's awesome — buying your first home at 19 and planning to house hack is a smart move! Here's some advice specifically for your situation and area (Warrenton, VA):

 1. Make Sure Everyone’s on the Same Page (Legally and Financially)
- If you're buying with friends, get everything in writing — ownership percentages, how costs and profits will be split, what happens if someone wants to sell, etc.
- Talk to a real estate attorney to draft a co-ownership agreement. It’ll protect your friendship and your finances.

2. Use an FHA Loan (if eligible)
- You can buy a multifamily property (up to 4 units) with just 3.5% down if you live in one of the units.
- It’s a common tool for house hackers starting out.

3. Know the Zoning and HOA Rules
- Warrenton and Fauquier County have zoning ordinances that can affect what you can and can’t do — especially around renting out rooms or short-term rentals.
- If the home is in an HOA, check the rules on renting — some restrict room rentals or require approval.

 4. Get Preapproved Early
- Work with a lender who’s familiar with house hacking. You’ll want to include expected rental income to boost your purchasing power (some lenders allow this even on your first deal).

5. Think Long Term
- Look for a home that can adapt to your life over the next 3–5 years — something rentable, in a growing area, and near schools or employers.
- Even if it’s your “starter home,” try to buy with investor eyes: layout, rent potential, low maintenance costs.

Best of luck!

Melissa Justice

Investment Strategist at Rent to Retirement

Hey @Jeremy Santy
There are definitely some strategies to consider depending on your goals and timeline:

1. Primary Residence Exclusion: If you live in the property for at least 2 out of the last 5 years before selling, you may qualify for up to $250K (single) or $500K (married) in capital gains exclusion. This is the cleanest way to reduce taxes, but it does require genuine use as a primary residence.

2. Entity Setup: If you plan to do this more than once, setting up an LLC or S-Corp can be helpful—not necessarily for tax savings alone, but for liability protection and to help separate personal and project finances. However, frequent builds and sales through an entity may cause the IRS to treat it as inventory and subject to ordinary income tax, not capital gains.

3. 1031 Exchange: This only works for investment properties (not primary homes), but if you rented the home out for a period first, you might be able to qualify. Timing and intent are key, and you'd need to reinvest the full proceeds into another investment property.

4. Developer vs. Investor Classification: Be mindful—if the IRS considers you a dealer (developer/flipper), your gains may be taxed as ordinary income, not capital gains. Intent, frequency, and presentation (e.g., how it’s marketed) can all influence this classification.

5. Installment Sale or Cost Segregation: Depending on how the sale is structured, you might benefit from an installment sale (spreading gain over multiple years) or depreciation strategies if the home is held as a rental before sale.

Ultimately, it’s wise to loop in a CPA or real estate tax strategist early, before you sell, so you can align your structure and timeline with a tax strategy.

Best of Luck!

Melissa Justice

Investment Strategist at Rent to Retirement

Hey @Ken M., 

Great question!

When a market sees price reductions, it usually signals a cooling or rebalancing of supply and demand. Here's what that might mean depending on your goals:

For Buyers:
Opportunity!
Price reductions often mean sellers are more motivated. You may be able to negotiate better deals, concessions, or terms. This could be a great time to buy, especially if you're investing for cash flow and not just appreciation.

For Sellers:
Time to be strategic.
You’ll need to price appropriately, make your property stand out, and possibly offer incentives. Overpricing right now can lead to extended days on market. But if your property is in good condition and cash flows well, there’s still a strong investor pool out there.

For Holders:
Hold tight (especially if you're cash flowing).
If you're in a solid equity or cash flow position, this isn't necessarily a time to panic. It’s a chance to evaluate your portfolio, consider improvements, or look for refinancing opportunities.

Markets cycle. The key is to play the long game and adjust your strategy, not your goals. And if you're looking for help navigating investing in today’s shifting landscape, our team at Rent to Retirement helps investors all over the country find cash-flowing properties—even in cooling markets.

Let me know if you'd like any market-specific analysis!

Wishing you much success,

Melissa Justice 

Investment Strategist at Rent to Retirement

Hey @Kate Bolia, 

Love your story—jumping into your Bali project with conviction and turning it into a cash-flowing asset is impressive, especially for a first-time investor. That kind of bold action, paired with a willingness to learn, is exactly what makes for long-term success in real estate.

Transitioning into U.S.-based investing with a self-directed Roth is a smart move, and combining that with your boyfriend’s contracting skills opens up a lot of doors—flips, BRRRRs, or long-term holds. Getting plugged into a strong network and working alongside a mentor is huge. It shortens the learning curve and helps you avoid costly mistakes.

If you’re looking to gain exposure to different markets or build passive income faster, that's exactly what we have helped investors do at Rent to Retirement through BP - assisting in getting started in cash-flowing markets across the U.S., handling the heavy lifting—property sourcing, management, etc—so you can focus on learning and building your portfolio confidently.

Welcome to the journey! You're already well on your way.

Wishing you much success,

Melissa Justice

Investment Strategist at Rent to Retirement

Hey @Jenny Warren, 

Great question! New builds can absolutely be a solid option, especially for first-time investors. While it's true that buying under market and renovating can build equity fast, it also comes with more moving parts—contractors, permits, surprises, etc. If you don’t have a team in place yet, starting with a new build can offer peace of mind with lower maintenance, warranties, and fewer headaches up front.

Also, builders offering favorable financing or incentives can make the numbers work better than you might expect.

If you're exploring outside your local market or want more guidance, we at Rent to Retirement specialize in helping investors buy new and renovated properties in landlord-friendly markets, with teams already in place. That kind of support can be a game changer when you're getting started.

You're asking the right questions—just keep moving forward, and the path will get clearer!

Wishing you much success,

Melissa Justice

Investment Strategist at Rent to Retirement

Hey @Sebastian Naczas - thanks for sharing your journey! Sounds like you've already laid a solid foundation with your rentals and tenant management. It’s totally natural to hit that “what’s next?” phase, especially after some years off from buying.

Given your experience and equity position, this could actually be a great time to leverage what you’ve already built. Tapping into your existing equity via a cash-out refi or HELOC might give you the capital needed to buy without the same out-of-pocket burden — especially if you're open to exploring out-of-state markets where your dollar goes further.

A lot of investors I work with at Rent to Retirement have been in similar situations — hit that financing wall, stepped back for a while — and then got back in the game by shifting to new markets or strategies. We help folks get into fully renovated, cash-flowing properties in landlord-friendly states, and many of them buy using non-QM loans or creative financing options that don’t require a W-2 or 9–5 job.

Happy to chat if you want to brainstorm ideas or see what’s working for others in your position. Keep pushing forward — the fact that you’re asking means you’re already on the right track!

Wishing you much success!

Melissa Justice

Investment Strategist at Rent to Retirement

I will private message you!

Hey @Niranjan P Ghate,

You're thinking about this the right way—seriously, you're ahead of the curve already.

1. Rules of Thumb? Yes.
Using metrics is smart for quick filtering. Try: 

Cap Rate: 6–8%+

Cash-on-Cash (COC): 7–10%+

Rent-to-Price: 0.8–1%
Use them as a guide, not gospel—always follow up with deeper analysis.

2. Universal or Market-Specific?
Somewhat both. Use the same baseline across markets, but adjust your expectations depending on the area's appreciation, rent growth, and risk profile.

3. Too Many Markets = Paralysis
Start with 2–3 investor-friendly cities (like Birmingham, Cleveland, or Memphis). Learn them well. You’ll move faster with more confidence.

4. Turnkey = Great First Step
Turnkey makes sense if you want a smooth entry. Just run your own numbers and vet the provider thoroughly.

It really comes down to investing in a growing market, in a good neighborhood & building a great team to support you. It can be a lot of time and work if doing it on your own. It's helpful to work with a reputable team. That is what our team at Rent to Retirement has been helping investors to do for a decade now with BP. I'm happy to answer any questions you have about analyzing markets or getting started. Most importantly, choose a market that aligns with your goals!

Wishing you the best of success!

Melissa
Rent to Retirement Investment Strategist