All Forum Posts by: Scott Trench
Scott Trench has started 160 posts and replied 2596 times.
Post: Do you need an LLC? Absolutely. There is No Debate About It.

- Rental Property Investor
- Denver, CO
- Posts 2,740
- Votes 6,167
I'm a young investor, and purchased a property via the "house-hacking" method back in November of 2014. The property is under my name, and I rent out the other side to two wonderful tenants.
The work has been done Do-It -Yourself style, and I have gone a few months now successfully living rent free.
Make no mistake about it, I consider this Duplex to be a business, and run it as such. I manage the tenants with a separate email address and have a separate bank account for property related expenses. I pay rent to the business and take money out of the business.
But the property is under my own name.
Reading the OP, I am committing a basic fail against common sense as a real estate investor. But I disagree completely. I had several immense advantages in putting this property under my own name that would have been forfeited were the property under an LLC:
1) I used FHA financing. Try putting down less than 5% on a property within an LLC, especially as a first-time buyer.
2) I am the occupant of the home. I can rent to whoever I want, and for any reason whatsoever. It's MY house, not a rental property, and the laws governing it are as such.
3) I had much better interest rates on my mortgage than the LLC would have had access to.
4) My mortgage interest is tax deductible. In the first few years, where the bulk of my mortgage payments are comprised of interest, this is more advantageous than depreciation.
5) Assuming I live in the property for more than two years, and the property appreciates, I can sell for a tax-free capital gain.
The disadvantages are as follows:
1) Limited protection. I'm 24 years old and this property is basically the grand total of my worldly assets. I don't have much to protect. I also have an umbrella insurance policy.
This type of protection is good enough for millions of landlords with far more to lose than I.
2) I'm obviously the owner of the property. I can't hide ownership behind an LLC. In my case, this advantage to the LLC is totally moot. The tenants live next door! I'm obviously the owner.
Conclusion:
Investing through an LLC would have been extremely expensive for me, setup and legal costs set aside. Furthermore, it would have delayed my first purchase significantly, and taken away subjective advantages in running my business as a personal asset.
I think that it is shallow to claim that having an LLC is a "no-brainer". I think that at the very least, my argument here shows that it is a debatable topic and that a reasonable person could conclude that there are indeed strong advantages to operating real estate assets under your own name.
Post: Votes from Joshua Dorkin and other power users

- Rental Property Investor
- Denver, CO
- Posts 2,740
- Votes 6,167
Now THAT's how you fish for votes!
Post: Will Millenials start buying homes?

- Rental Property Investor
- Denver, CO
- Posts 2,740
- Votes 6,167
@Account Closed
That's very true. But if you are paying rent of $1,500 per month, and then you switch over to a PITI of $1,500 per month, perhaps 70% of your payment goes to interest, taxes, and insurance. 30% might go towards principle. In my limited experience, I find it to be rare that people go from one rent level to a much higher mortgage payment. Most kind of just get the coolest apartment or biggest, nicest house in the best area that they can afford, which is pretty similar in amount.
Anyways, if 30% of that $1,500 per month starts going to equity in the property, that's $450 per month. Of course, they are still paying "the man" the remaining $1,050, but it's the difference between a -100% return on their rent, and a -70% return on a housing payment.
That's a massive financial difference, though still a loss. Most can't quantify the expense in the way that I describe here, but it becomes very obvious over time. It's a massive reduction in lost wealth.
Post: Will Millenials start buying homes?

- Rental Property Investor
- Denver, CO
- Posts 2,740
- Votes 6,167
I think that all things being equal, it's my belief that many in my generation would rather not own homes for the time being. I will say that as a tenant, it was nice to not have to worry about anything, to have the flexibility to up and move to another city when the lease expires, and to have the ability to remain mobile.
I don't think it's a stretch to argue that Millennials are less interested in owning property than previous generations. I think that for many of us, property represents a physical constraint that imposes on our freedom to move from city to city or country to country in many cases.
On the other hand, the financials of home ownership are so clearly stacked in favor of owning vs renting, that Millennials want to own for THAT reason. The number one financial thing that my friends and peers complain about is that it sucks to pay rent. It really does. That's why I began house-hacking as soon as I was able. I think that's why most of my peers will eventually end up owning homes as well.
I think that it's going to be very difficult to quantitatively demonstrate or back up my claim that Millennials (at least that I know) are less inclined to want to own property than our parents when the financial benefits of owning vs renting are so significant. I don't care what my preference is, a difference of $100K or more over a decade is a pretty powerful reason to buy property.
Post: NEW Short-Term and Vacation Rental Forum!

- Rental Property Investor
- Denver, CO
- Posts 2,740
- Votes 6,167
By popular demand, BiggerPockets has just launched the new Short-Term and Vacation Rental Forum!
Now, as a member of a college fraternity, and and having played with many traveling rugby clubs over the years, I've been a firsthand witness to what the wrong tenants can do to a nice vacation rental home. I think I might personally be out on the whole vacation rental business for life.. but I digress.
This is the go-to place for any questions, concerns, or discussions about vacation or short-term rental properties and the unique challenges and strategies that accompany this niche of real estate investing. We've seen interest in this type of investing grow over the years and are excited to offer this new forum for your discussion.
I'm excited to see what's discussed in this new forum!
Special thanks to @Karen Margrave for helping us to create and build this brand-new forum.
Oh, and by the way, if you know of any previously created forum threads that should be moved over to this new forum, please link to them in the comments below. I'll be sure to move them all over to the new forum!
Post: How big a dumpster?

- Rental Property Investor
- Denver, CO
- Posts 2,740
- Votes 6,167
@Jean BolgerI'm making an assumption here, but if you just got to 100% occupancy, you might have recently had a higher than usual number of move-ins. Move-ins might result in a lot of trash from unneeded boxes and packing stuff, and all at once that could result in your overflow. If this is the first time you've been to 100% occupancy, that could be part of the reason for the overflow.
On the other hand, you might see the same problem next year at move-OUT time..
Post: $17,000 PER WEEK ON A VACATON RENTAL!!

- Rental Property Investor
- Denver, CO
- Posts 2,740
- Votes 6,167
Thanks @Karen Margrave!
We will launch the VR forum as soon as we have somewhere in the ballpark of perhaps 50 high quality forum threads that our users have identified as appropriate to be moved to the Vacation Rental Forum! I see that we have identified one right here in this thread ;).
Post: Are you financially literate? Most Americans aren't.

- Rental Property Investor
- Denver, CO
- Posts 2,740
- Votes 6,167
And everyone wonders why income inequality is increasing...
Post: Cant Purchase Book in BP Store. Please help.

- Rental Property Investor
- Denver, CO
- Posts 2,740
- Votes 6,167
Originally posted by @Jeff L.:
Hoping someone at BP can help here. I've tried on 2 different devices (laptop and tablet) to download the digital version of both J.Scott's books on Rehabs and Rehab estimates. Each time I enter my info and click "Submit Payment" NOTHING happens.
Can anyone at BP help here?
Thanks.
Jeff
Hey Jeff,
I just purchased the book and was unable to find any problems. I'd try the following:
1) Make sure that your browsers are up to date (my successful purchase was made via the latest version of Chrome for MAC OS).
2) Try it on a couple of different browsers
If things still don't work for you, please send a screenshot of your problem, along with pertinent information like your Operating system and browser (version, year, etc). Please also let us know what type of card you are using.
You can send that information to [email protected]
Post: VACATION RENTAL FORUM? THOUGHTS?

- Rental Property Investor
- Denver, CO
- Posts 2,740
- Votes 6,167
Originally posted by @Karen Margrave:
Thanks for this! We will need to come up with a number of quality posts and threads to seed this new forum category. Please respond with as many as possible.