All Forum Posts by: Nate R.

"If I was going to offer to buy this apartment from owners that have no interest in selling it, how would I or someone else do so?"

Off-market deals like this happen more than you might think.

It's pretty simple to call or write the owners and say "I'd like to buy your complex for X". An agent might help you do this.

They can say yes or no. If they say no, then you repeat the process with all the other run-down dumps in town. Who knows, maybe they'll change their mind and you will be the first person they think of contacting. 

You might want to think about other strategies besides house hacking.

Having a similar problem. My fiance is a big saver, doesn't spend a lot of money, but she's very focused on security. She listens to the role models in her life: her parents, her godfather. They all have an employee mindset. The issue I have is that she's putting a large amount of her salary in a 401k and refuses to consider stopping her contributions. That's money we could be using to buy back our time.

The advice I got from a respected mentor is to "give her a big hug" and lead by example. Have her read Rich Dad Poor Dad, attend some seminars, etc. Love is too valuable to let something like finances get in the way, he says. I would add the caveat that's true unless you see irresponsible behavior (high spending, debt) that will doom your financial success in the future.

Is there any reason I wouldn't want to pay property taxes out of escrow?

I can't remember where I read this but I read it's better to pay separately, as it makes it easier to track or some other reason.

https://en.wikipedia.org/wiki/Operating_agreement

"Many states in the United States require an LLC to have an Operating Agreement. LLCs operating without an Operating Agreement are governed by the State's default rules contained in the relevant statute and developed through state court decisions."

Some quick googling seems to indicate that an Operating Agreement is necessary documentation to prove that the LLC is a distinct entity from the member, even if it's a sole member LLC.

It would be a sole member LLC.

I thought LLC's had to have an operating agreement?

Maybe this is not the appropriate forum. Probably should talk to an attorney.

Do I need a special operating agreement drafted for the purpose of holding a long-term rental in an LLC? Or is it sufficient to use an "off-the-shelf" version I can buy online?

I'd be interested in learning how this works. Seems like an active strategy suited for someone with a lot of capital and time.

You didn't talk about this risks either. Surely there are risks. 

The property I'm looking at cash flows, at a rate that's consistent with the local market. Any appreciation would be a bonus and makes a successful exit possible in a few years, if I'm right. But the deal works regardless of any appreciation, if I hold it long-term (barring some kind of shock or oversupply situation that would push rents down).

I could go to the Midwest where I can get higher cash flows, but less appreciation. I'm comfortable with somewhere in-between, in an area I'm familiar with and can easily travel to see the properties. That's what I meant about appreciation.

Well said! This is exactly what I was thinking, and when I hear statements like "buy below market" it creates a lot of cognitive dissonance for me.