All Forum Posts by: Sean Smyth

Thank you Nathan and Tim.  This is really great insight.  I don’t know many other investors personally who I can ask these questions so having a knowledgeable community of peers like you guys is great.  I guess the hunt begins for property.  I appreciate the advice!

That's nice, but do you have an opinion related to my questions? Do you think it makes more sense to start the LLC before purchasing the first property and buying that way or not?

So obviously this answer will be different for everybody, but just wanted some different opinions on here regarding at what point in your real estate investing journey it makes sense to form an LLC (in Wyoming). Here is my situation: I am ready to execute my first deal on a duplex and am targeting between $150k-200k sale price for a unit with very little to no repair needed. I rent, and do not own any other properties. I own my car outright, but that's my only asset other than liquid. So some of the benefits of the LLC I'm considering are that my personal assets won't be able to be seized if my LLC gets sued by a tenant or if the bank comes to seize the property for some reason. I know the LLC will make sense down the road when I have lots of properties and want to protect them from one another, so I'll have them each in their own LLC. However, for now an LLC means probably higher interest rates, tougher time securing financing (from what I understand) because banks like me to have liability, and increased annual fees associated with the LLC. But if were to wait and form and LLC later when I have more assets I want to protect from one another, I'm likely not going to be able to transfer my existing investment properties into the LLC because it will affect the mortgage terms and I may have to pay the full amount of the mortgage off at that point, which is not ideal. So I'm struggling; do I form the LLC now and just accept the fees and higher interest rate and more difficulty securing the loan (if this last part is really even an issue), or do I wait until later when I have more assets I want to protect. And if I do the latter, how can I transfer properties into this Limited Liability Corp without mortgage terms changing or selling and having to pay capital gains taxes on them? Trying to not have analysis paralysis because I just want to get this process started, but I want to make sure I'm doing it the correct way. Anyways, any opinions are appreciated!

My situation: I have about 80k liquid in the bank, am able to save about 1.5-2k per month at the moment. I'm going to be investing out of state, so with a conventional or commercial loan I will likely have to put 25% down. Just curious what the max everybody here who has done it before would recommend I put towards a down payment and how much I should keep as a safety net. I'm targeting between 12-20% ROI. Thanks in advance.

I'm finally at the point where I'm researching deals and am reaching out to team members in some areas in the Midwest to start finding me deals.  However, I'm not really sure how much money I should set aside for repairs and vacancies.  I've talked to a couple investors who had wildly different approaches.  One person tells me that they save HALF of all income per property in a slush fund in case something happens, another person I spoke to only has $10k allocated per property.  Is there a general rule of thumb that will keep me out of trouble?

Thanks for the reply Chris!

I am looking into buying land for a Short Term Rental and am considering purchasing a Boxabl home on it rather than a traditional wood home build.  I would need to lay a foundation for the Boxabl home, but that's all the construction that would be needed.  However, Boxabl is on a year long wait.  I know with some construction loans you can buy property, but not start paying the loan until the construction has been completed.  Could I do something like that with Boxabl where I wouldn't have to start paying the loan back until the until was delivered and installed?