All Forum Posts by: Kyle J.

Do you currently have rental income? I didn't get the impression that you currently had any from your original post.

In any event, even if you started getting rental income today, the banks aren't going to count it right away. Rules will vary from bank to bank, but it's not uncommon for them to want to see the rental income on 2 years tax returns before they'll consider it. At least that's what I've experienced.

Also, speaking of personal experience, a relative of mine (who has excellent credit and lots of cash in the bank), recently tried to buy a rental house using a bank loan. However, even though he could buy multiple houses for cash if wanted to, all the banks he spoke to wouldn't even loan him the money for one because he's retired and has no earned income.

No, and I don't see how it could.

David Ackerman I think it all comes down to your personal level of comfort and risk-tolerance. If I were in your shoes, I wouldn't be worried about taking the property out of the LLC, especially considering you have a $2 mil umbrella that still covers you.

I don't have any of my properties in a LLC, and the problem you are running into is one of the reasons why.

For what it's worth, I recently did exactly what you are trying to do (cash out mortgage on a paid off property). And while there will likely be some banks that want to see the property in your name for a full year, the vast majority I spoke with when shopping rates (including the one I ultimately went with) only required the property be in my name for 6 months.

I have 4 SF rentals. Two of them were rented a couple days BEFORE I had them ready/available for move-in or even advertised (got both tenants through word of mouth that the property was going to be available). On the 3rd property it took me a week and a half (the longest I've ever had a unit vacant), and the only reason it took that long was because I was being choosy since I had dozens of interested people. And the 4th, most recent one, took 3 days to rent.

I also helped my dad rent two of his SF houses. One took 1 day, and the other took a week (though he could have had it rented in a day or two if he wasn't being choosy).

My feeling is that if it's taking you more than a couple weeks to rent it, there is either something wrong with the property or you have it priced too high, as a general rule. Though I suppose there could be markets/areas where things take longer for some reason or another.

Like Brian pointed out, without information on potential rent amounts it's hard to give you specific answers. However, as a general rule, I would rather buy 10 lower priced homes then 10 $250K homes. My reason is simple - the rents will not increase proportionally as the price of the home goes up.

For a quick example, in my area I know I can find a $50k house that I can rent for $900/month. So, one might think that you should be able to get five times more rent for a house that cost five times more, right? ($900 x 5 = $4500/month rent, $50k x 5 = $250k house.) However, that's not at all the case.

In fact, I actually have a $250k house that I rent out, and it rents for $1500/month. Now you should start to see why I'd prefer the lower priced houses, since just two $50k houses at $900/month rent would out-perform my $250K house and I'd have a lot less invested with those 2 houses.

As for getting loans after 10 properties, it is still possible to finance properties but the rules change, so to speak. You won't be able to get the same ultra low rate traditional loans (at least not in your own name) after 10 houses because government-backed loans (i.e. Fannie Mae) have a cap of 10 total financed properties. But you could always look for a different type of loan or partner with someone.

Good luck!

Nice. What kind of property is it?

I respectfully disagree.

If I have a buyer's agent (whether or not I've signed anything with him/her), and the seller has a totally separate listing/selling agent, and we are in negotiations - how (or even why) would my agent have any sort of "fiduciary responsibility to the seller"?

Personally, I wouldn't make it a goal to wait.

It may be the "slow season" for people looking to buy, but it's probably also the "slow season" for people looking to sell (i.e. less inventory to choose from).

Plus if you need to do any repairs/work outside the home, the inclement can make that harder to accomplish.

I recently had to do some work (i.e. patching stucco, painting, new exterior doors, etc) outside of one of my houses that I just bought and was in the process of remodeling. Fortunately for me it was nice and sunny out, but I was just telling someone how much harder it would have been if it had been the rainy season. Not even sure I could have done it at all.

Welcome George. Nothing wrong with making mistakes. Everyone makes them. At least you were still able to make a profit. Plus, we often learn more from our mistakes than our successes.