All Forum Posts by: Nicole A.

@Matthew Horstmyer Yes, I've used the BRRR method. It definitely was not my first deal. If you're dead set on doing a BRRR right out of the gate, then by all means, go for it. But just remember that if you make a mistake (and that can definitely happen especially being new to this), you will turn your large pot of cash into a large pot of debt.

I also have a lot of experience house hacking. In fact, I'm currently house hacking again after a 3+ year break from it. When you share your home with someone, I highly recommend a monthly lease. That way if you don't mesh together well, but they're otherwise not doing anything bad, you can simply end the lease instead of be committed for a year.

Remember, that RE investing is not a get rich fast game. It's for the long-haul.

@Jason Xue In your case, no, I probably wouldn't suggest it. I did not see the details of your deals in your original post, and so many people seem to think they need a separate LLC for every single property. I'm talking small properties...just a single residence or even a small multi-unit. And on top of it, they have little equity.

But they are told (surprisingly by some attorneys that--in my opinion--are preying on investor fears of being sued) that every single property needs its own LLC. My little $140K rental with like 30% equity does not command the cost of its own LLC each year, the extra bookkeeping, the separate bank accounts, the separate tax filing. It's silly. If someone with a small rental or even several rentals gets sued and they have little equity, there isn't really much asset for someone to sue them for...the lender would be first in line no matter what.

Apologies for my assumptions but from reading your first post, I assumed it was yet another person with that type of question. I personally will have a separate LLC for every $1M *in equity* I have or for each state I am investing in.

May I ask why you're starting this out so complicated with multiple LLCs and out of state LLCs?

You need to treat each LLC seperately, so each one has its own bank account. Each LLC needs its own operating agreement and other various paperwork. Each has its own tax filing. Each pays its yearly fee to stay active. Complicated and expensive for no real reason especially if your properties have little equity.

@Matthew Reid From my experience, properties like this cash flow great on paper. But in reality, the repairs and bad tenants make you need to practically triple your savings for those categories. These tenants probably won't have any credit or bad credit, so there is no point in requring a certain score. You just basically look to find the person who pays most of their bills. They will all have bad credit or they wouldn't live there.

You must be strict and firm (but fair) with these kinds of rentals. You warn them the day that they sign the lease that the very minute rent is late, you are filing for rent court. So they don't even need to bother with the stories, excuses, and guilt trips. If they decided to mail you the rent and it arrives late, that is their own problem. You can't prove they actually mailed it, so treat it as nonpayment if you didn't receive it on time.

Some tenants will sound great and then try to show up to lease signing with only some of the money. Never let them sign the lease if they are short on the money! 

Finally, these neighborhoods don't tend to appreciate in value. They're not really ones you can flip or improve or accurately expect any ARV on. They're just kinda stagnant strong rental neighborhoods. These can be the kind that make you great money each month when things go right, but they can also wear you down with the constant attention and babysitting they tend to require.

Yes, typically it is 20-25% down even on a lower price. But sometimes if it's super low price, they might not want to loan on it at all. Just go in to a few local banks and have a quick chat with them. That will get you the best--and most accurate--answers to your question.

To add to my last comment, I would recommend you become very familiar with your local laws. They're probably easily found online. This way, you can be confident when tenants make random claims about what is and isn't legal as they try to bully you.

Sorry to hear you're having troubles again. So, I would not say it's "illegal" to not have a mailing address, but then again I don't know your local laws. I still would be surprised. However, it would probably be pretty standard to have a mailing address. I would not recommend your house address, so yeah, get a PO Box or something cheap.

But here's what will happen next. She will claim she mailed the rent. It won't arrive at all or it will arrive late. You won't be able to read the postmarked date easily if at all. So you again will be the evil landlord charging late fees or filing for rent court.

So just do not engage her whenever possible. She has agreed to pay via Zelle or Wells Fargo, she needs to just do that. Your responses to her can be charging late fees and/or rent court. But there is no need to get into debates with her. It's a waste of your time and you're just getting abused with the threats and name-calling.

@Carlo Campbell as someone has already asked, how would you move in? You can't just move in, Carlos. Yes, there may be a lot of laws in Philly, but there must be a way to legally get control of your property. I invest in the Baltimore area and we have plenty of tenant-friendly laws too, yet I'm still evicting when need-be. 

Typically the biggest reason people take forever to get their properties back is not just because of tenant-friendly laws but because the landlord/owner *does not take action in a timely manner*.

I just now did a very quick Google search for "Philidelphia eviction services" and see several options. These are a bit like property managers but they handle just the eviction process. I highly suggest you do the same Google search and start making phone calls either today or on Monday (since we're pretty much in the middle of a major holiday right now).

I like Todd's idea of house hacking to start. You could take advantage of the VA loan which I believe lets you put nothing down. You'd just have closing costs. You could buy a duplex, triplex, or quad because a quad (4-unit) is the max amount of units most loans will allow for a personal/primary residence. But some can vary and you'd need to confirm this with whoever your lender would be. Otherwise, you could just get a single-family home (or townhouse) and rent out the basement or an extra bedroom or 2.

After one year of living there, you could move, turn it into a full-time rental and do it all over again. This is how you make the most of the low downpayment loans that are VA loans or normal primary residence loans.

I would recommend this as a first step into REI over jumping right into a BRRR for your first deal. You get to learn first-hand while acquiring properties and keeping the most amount of cash in your pocket with less risk.

@Nick Pass  This is an extremely common topic, and I highly recommend you just search the forums and read the countless existing threads rather than make another thread to add to the sea of "how do you collect rent". 

And then when you read various services people are using, go to those service websites. Their websites usually do a great job of providing all the info you need regarding how to set up, how it works, fees, etc. :-)