All Forum Posts by: Justin B.

This is absolutely my personal opinion, but 99.9% of the time:

-- Anyone who says all you need is an entity is stupid!
-- Anyone who says all you need is insurance is stupid!
-- Anyone who says you don't need either is stupid!

I think you get the point :)

There is a strategy to using multiple LLC's. I don't believe any of them change your total tax bill. Everyone's situation, comfort level, and knowledge level is different so I'd suggest consulting with a CPA and a lawyer at a minimum about your certain situation to decide what method is best for you. I know it's not the answer you wanted to hear, but there are literally thousands of ways you can structure things and everyone is different.

*A* bank said no (as in 1 bank). There is 1 out there who will say yes eventually if the deal is decent.

Packaging all 3 of them is certainly an option. I have refinanced individually and I have a bank that will let me refinance back up to 85% LTV. 80% may be more realistic for most. I usually refinance when my equity hits ~40% (60% LTV). If I need money, I'll do it as low as 30% equity. I'd suggest you just call up your banker and say you want to re-finance all 3 for as much as they will let you take out and let them do the best method. They may be able to save some closing costs by combining some things. And it goes without saying, but you should make sure that you will still cash flow decently positive after this.

My first deal was in 2010 and was an SFR. We bought it with seller financing on a no interest deal for 6 months (he was a motivated seller). We then borrowed from the bank and paid that off. It was cash flowing about $125/month positive from day one as it had a renter in it already. Unfortunately, in month 4, the air conditioner went out and cost over $3.5k. That wiped out profits for a few years. Now, it's 2014, we've raised rent $200 and it cash flows $300+/month now. We also just refinanced it and pulled $1.2k MORE than our down payment back out so not only do we have $0 in it anymore, but we got $1,200 on top of that *AND* it's cash flowing $300/month. One of worst performing properties in the beginning and now it's one of the best. Funny how time works with real estate :)

Thanks. It really is nice to finally see a milestone like this. It helps keep you moving forward!

So one of our goals for 2014 was to re-finance the first property we ever purchased. While we had hoped for $10-15k back on that re-finance, it turned out to be $8.2k instead. The appraisal came back lower than we were expecting, but such is the life of SFR investing. Even though we've increased rent $200/month since we purchased in 2010, the appraisal in 2014 was actually 5k LESS than it was in 2010. Yes, we contested it, but it did no good. Again, no one wants to negate an appraisal in the SFR market nowadays. It's a good reason we're venturing into MFR's this year so we have some control over value. But I digress.

In 2010, we put $7k down to purchase this property. We refinanced and just had $8,200 deposited into our bank account. What does this mean? We now have $0 invested in this property. In fact, we were basically paid $1,200 to buy this property (we just had to tie up some money for 4 years). You could even take a step further and say not only were we paid $1,200 to purchase the property, but we were given 15% equity as well (since the re-finance was at 85% LtoV).

This is commonly referred to as "infinite returns". It means the function that calculates cash on cash return now returns an error :). Sure it took 4 years to accomplish this, but it's a huge milestone for us. We now have a property returning a positive cash flow (and a decent one at that) and we have absolutely no money invested in this property anymore. If anyone is looking for a reason to invest in real estate, here it is!

I am in B neighborhoods. My SFR's are $70k - $100. I am averaging 10% down payment on the loans. If I put more down cash flow would probably be higher, but I always look for the smallest down payment I can. It's a small bank that is only in my state. And the toys will come when I can enjoy them because I don't have to work anymore :)

Sure. So far I've invested about $40k (down payments) and the monthly cash flow is $1,500. I'm just doing math from there. Plus, we've refinanced one house already, pulled out the initial investment (payment is the same after that since we've paid it down over the last 4 years), so technically I've only got $32k invested right now with ~$1,500/month cash flow. Again, Math. So far this is 5 SFR's. If I did NOTHING MORE, I could probably refinance all of them in the next 3-4 years enough to pull out the original down payment (keep the payments around the same) and have $1,500/month (more probably due to rent raises) with $0 invested. Then it's just rinse and repeat.....

God bless you sir! :) No way I would have had the time to do that.