All Forum Posts by: Ryan Lesley

Hey Kenny,

So when I was having this same debate with myself I had a similar opinion to your father, in that I figured if I was only going to have a couple properties was it really worth it to put them in individual LLC's. I did my research and came across a company called Anderson Business Advisors and they essentially said to do the opposite of what I was thinking. Basically they framed it like this. And this is something you definitely want to consult an attorney on, this is just my understanding based on what I found when doing research. 

But they basically asked the question: When you own 2 properties, and they are in your name instead of an LLC, what happens if you have a situation with one of them where you were liable for damages? The short answer is that both properties are at risk because they are both tied to you personally. This also works in reverse for to your personal liability. Meaning if you were to have a situation where you were being sued, car accident for example, and the suing party's attorneys were to take a look at your assets they would see both those properties as something they could recoup damages from. Keeping properties in individual LLC's offer you the most protection from these situations.

The other thing to consider is this. Yes it's only 2 properties, but they comprise 100% of your investments. The only time I would personally consider changing the 1 LLC per property strategy is when I had maybe 100 properties and instead grouped them with 5 properties per LLC. Relatively speaking, I'm risking only 5% of my assets (if one of those grouped properties became a liability) and would also save quite a bit of money by having to create 20 LLCs as opposed to 100 LLCs.

This is a video I found where they explain the strategy of series LLC's (if allowed in your state) and I figured might be another option to consider.

Hope this helped, and best of luck 🤝🍀

Hey Jordan, 

happy new year, I hope your year is off to a good start and that your making good strides towards your goals.

To the best of my knowledge there isn't a requirement for you to disclose that you're transferring a property into a land trust once you've purchased it, since it's yours to put into any sort of entity you chose once you buy it. The only thing related that comes to mind is that sometimes closing in an LLC or land trust can create difficulties or extra steps. But as with anything like this its always best to consult an attorney. When I was trying to understand the nuances of land trust I went on youtube and had found this video (below) that really helped me understand how to utilize them and the specifics related to anonymity. Not to mention that I felt pretty good that they understood exactly what strategy I was trying to implement without having to explain it to them, so I wound up signing up for their free strategy session and I've been really happy with them since. 

Hope this helped, best of luck 🤝🍀

Hey Santosh, 

I had several questions regarding the same thing when I was interested in LLC's for rental properties. Like the other two have suggested definitely consult an attorney, which is my recommendation as well but I'd also like to point you to this video in particular that helped me and that I found very useful.

I personally use Anderson Advisors, and I like that they are business attorneys as well as CPAs under one roof that understand real estate investing strategies. 

They also offer free webinars and strategy sessions that you can sign up for here if you're interested. 

hope this helps you out and best of luck 🤝🍀

Hey Adam, 

So something that I have used to find more listings/off market deals, and was actually brought to my attention by YouTuber Brandon Mullerin, is called Remine Pro. His video here is a nice demo on how to use it and showcases some of its built in features like how to download and export lists and utilizing options for segmenting or targeting off market deals with varying degrees/types of motivation. from personal use I know you can also create and send out mailers directly to those lists he shows you how to make.

A lot of your needs regarding contacting and documenting conversations sound very much like a CRM, which you could pair with Remine Pro to get all your bases covered. I personally only have experience with KVCore and BoomTown, but I have also heard really good things about Chime. 

Hope this helps, best of luck 🤝🍀

Hey Denise, 

So I personally use the built in mileage tracker function on my quickbooks app on my phone where I can either manually track the trip or let the auto track feature do it, and then go back and categorize it as personal or business. Also, and I'm sure MileIQ is similar, I can set up the app to have common destinations auto categorize. For example I have it set to auto categorize the trip from my house to the grocery store I frequent as a personal trip so I don't have to manually do it. 

What's funny is, you specifically said you want something that doesn't drain your battery, and when I went to the app store to download the quickbooks app the promo video actually specifically stated it doesn't drain your battery. I used it yesterday to track several showings I was on with a client and didn't notice any abnormal draining, so maybe they're right! 😂

Also, I don't remember who, but I was listening to a biggerpockets podcast and someone had mentioned Everlance. Haven't personally used it but they had recommended it so maybe something to also look into.

Anyways, hope that helps 😊

I'm not sure if you are aware or have looked into buying discount points to lower your rates.

Discount points are like coupons that you can use to lower the interest rate on your mortgage. Each point is equal to 1% of the total loan amount. So, if you have a $200,000 mortgage, one point would be worth $2,000.

If you pay for discount points, it will lower your monthly mortgage payments. But, you will have to pay more money upfront. It's like trading money now for money later.

The other thing to keep in mind is that, depending on your market, seller concessions are starting to become something much more attainable - which you can put towards buying discount points. 

Also, you may have heard or seen listings with the term 2/1 buydown.

A 2/1 buydown is a special kind of mortgage that can lower your monthly payments for the first two years.

When you take out a 2/1 buydown mortgage, the lender will charge you a lower interest rate for the first 2 years, but after that, the interest rate will go back to its original amount. At which point the strategy is that hopefully interest rates have decreased and you can refinance into those lower rates. 

here is a helpful infographic I found:

Source: https://mortgageequitypartners....

I hope this helps, best of luck 🤝🍀

Hey Joseph,

I'm glad to see you starting your financial freedom journey so early, you're way ahead of where I was at your age so awesome job and stay the path.

What @Scott E. said is very solid and fundamental on how you should approach any market you're looking at investing in. All I would add to it is this. 

When analyzing these deals, also take into consideration future changes and how it could possibly take an ok deal and turn into a great deal. 

For example, here in the Denver market multifamily/duplex+ properties don't typically make investment sense from a house hacking standpoint, whereis properties with a basement and separate entrance very much do.

When speaking with a client who only plans on living in the house hack for a year, my question to them would be: 

After you move out do you plan on renting out the whole house, or do you have the option (like with a basement and separate entrance) to mix it up and maybe long term rent out the top and mid term/short term rent out the basement? Giving you the stability of a long term rental with the higher, but sometimes seasonal, returns of shorter term rentals.

Making sure they do not configure the house in a way that would limit them from renting it out to only one type of strategy is also a consideration. Since it ensures the most flexibility if they did need to pivot from a short term rental to long term rental. Maybe a law changed limiting their ability to short term rental the home, but because they walled off access from the 1st floor to the basement, it is now much less desirable of a home in terms of renting the whole home out. 

The other thing I would consider if you really wanted to get into a multifamily/duplex+ and the numbers don't make sense right now is: If I live in one of the units and rent the rest out, how negative am I relative to how much it costs me to rent?

So just say you get a quadplex with 2/1 units, and after renting out the other 3 units you're still having to cover $900 a month. If you're paying (or would pay if you did rent) say $1,900 a month for a 2/1 apartment, you've essentially reduced your monthly living expenses by $1,000 - on top of the fact that you're increasing your equity in a property that in turn is appreciating which in turn is increasing your net worth. 

Not to mention that depending on what the future holds: 

1. Rents could increase to a point where when you move out after a year and you rent all the units that you're now covering the full amount, if not hopefully cash flowing. 

2. Interest rates decrease, you refinance, it cash flows, you live there for free/ or you move out and it cash flows even more.

Of course, it's important to acknowledge that even after renting out all units its still possible that it doesn't cover the full amount or cash flow, and rates don't decrease. The biggest question is if that happens, would you be ok to wait another 1 or more years for this property to start cash flowing? Is the appreciation more important to you than the cash flow?

So just to circle back to what Scott said, definitely compare the two and find out what makes most sense. But also take into consideration the future changes that could happen. Consider best case and worst case scenarios like I've mentioned above and then make a decision that feels in line with your goals and risk tolerance. 

Hope that helps, and best of luck 🤝🍀

 Hey Josh, 

I know you said she just wants the payment, but has your conversation with her extended into her whys?

Why is she selling?

Why does she just want the payment?

What I am getting at is there may be some more complexities regarding her situation that if you understood would help you in offering her a creative solution.

For example, if reason for selling the property  is to just wash her hands of it for one reason or another to simply cash it out - Does she know that offering you seller financing would not only have tax benefits for her, but also help you with your situation in getting a loan on this property. 

Also, If her why for just wanting the payment is to cover living expenses and/or the purchase of something she needs, you could negotiate the down payment as a way to cover the purchase of whatever it is she's looking to purchase and/or negotiate the payment terms of the loan to cover her monthly living expenses.

Knowing her whys will give you much needed information to be able to craft a creative offer and really these examples are just the start.

feel free to message me or reply here if you wind up speaking with her and find out there may be a creative route to take and need some help with ideas on how to craft the offer. 

Best of luck 🤝🍀