All Forum Posts by: Rick C.

No problem, @Account Closed. If you decide to move your property into an LLC, you should check what fees would be associated with such an action occurring in your area. For example, locally for me, the city of Philadelphia requires that the transfer tax is paid on the accessed value of the property transferred. The transfer tax is 2% out / 2% in, which totals 4%. That can get expensive very quickly.

You are correct that the mortgage holder could legally call the loan due if you transfer to an LLC. Although, it is rare that they will actually do that, especially if you are consistently making on time payments.

@Account Closed - Two of my original rentals are in my personal name, but I am looking to change that though via a sale of one and a refinance/transfer of the other into an LLC. Both have 30 year fixed residential mortgages on them.

The rest of my properties are in LLCs. They are all owned free and clear, but I am actively looking to cash out refi them. Commercial loans will be required for those.

Thanks a lot @Chris Martin and @Brandon Ingegneri.

Two more questions:

1. Can I use one credit card for all of my LLCs, as long as each LLC bank account reimburses its part of the credit card bill?

2. Are meeting minutes necessary for a single member LLC? If so, what should they look like?

If you think that a property you are purchasing in your personal name may someday be transferred into an LLC, check the costs associated with that transfer. For example, here in Philadelphia owners are required to pay the transfer tax on the assessed value, which amounts to 2% out of your personal name and 2% into your LLC. If the property is assessed at say $200k, the costs for the transfer tax alone would amount to $8k! Something to consider when weighing the costs/benefits of such a decision.

@Patrick Donohue - Is there a market for a 6 bedroom in that neighborhood? What is the square footage of the house?

Wholesaling is when a buyer (the wholesaler) gets a property under contract, then finds another buyer to assign the contract to for a higher price. Normally, the wholesaler will not even take ownership of the property, but will instead collect the spread between the original price and the assignment price.

I am assuming the property is zoned as a duplex. Would your city allow it to be converted into a triplex?

Thanks @Ray Rex, that definitely provides a lot more color. To take care of the financial issue, I would network with as many local banks as needed. Let them know what you will bring to the table, and that you have the necessary experts to help for the areas in which you are not as strong.

Additionally, I would do more research on the markets you are looking to target. Flipping could be very lucrative and quick in one community, but very challenging, slow, and costly in another. Proceed cautiously.

It would depend on the specific neighborhood. Research the houses in that price range, make a list, and based on that list, decide which target neighborhoods you will focus on. From there, you will need to research going rental rates. This can be done by doing a search on Hotpads/Craigslist of example 3/2 houses for rent and by networking with local property managers.

At the end of the day though, it is much more involved than simply the numbers. Drive the streets, talk to neighbors, look up crime stats, etc before making any moves. Good luck!

Hey Ray. Welcome to BP! That's great that you have already gotten your feet wet with some rentals. To give you advice, we would need more information. What type(s) of properties are looking to acquire? Would they be in your local market or in another market? What is your end goal with said properties?