All Forum Posts by: Soh Tanaka

Have you thought about using a turn-key company?

Just strictly looking at the rent-to value ratio, you found a pretty good one (assuming little rehab is required to make it rent ready), so congratulation!

You always get a better return on your money by having a mortgage. I'll vote for the delayed cash-out refi. You tend to get a better mortgage if you wait for 6 months. Once you get the money back, invest the money. Much better use of your money, IMO.  

Buy the house first. After you purchase the house, if you think you need LLC, then just transfer the title to the LLC. Just so you know, it's OK not to have LLC when you only have one property.

I'm in the process of trying to get a quote myself. I haven't finished yet, but I started the process with National Real Estate Insurance Group online. I'm a huge fan of getting things done online for everything, but sometimes it's a benefit when you can talk to someone over the phone, especially when it comes to insurance, as it could get complicated. 

I think your paragraph got chopped off at the end. I appreciate you writing all the details. I'm sure you have a lot of questions running through your mind right now. There are two ways you can do the cash-out refinance. One that you can do right after the closing, sometimes called delayed-cash-out refinancing, and another one you have to wait for 6 months. Generally speaking, the term is better (assuming the interest rate is the same for the next 6 months), when you wait 6 months. If you need a lender who can do the delayed-cash-out refinancing, please PM me.   

I don't know the area and what the tax is for this house, but usually the number start to work against you when the rent is less than 1% of the purchase price, especially if you have an HOA. It's as if you bought a SF house with no HOA for $92k, but the rent is $725. That's a tough one, but then again, you think you can raise the rent, so that's good.

A few points of concern. 

• You only have $6k in cash. I think that's super low. You make good money, so you should look at where you are spending your money and should start saving. If you are 41, you can afford to not to contribute to 401k for a year (some even thinks 401k is a total waste of money, especially if you are going to invest in real estate).
• Another thing is, have you seen inside of the house? I will make sure.  
• I understand you are semi-handy, but I would hire people to do the work. You have a lot going on in your life, and it'll be hard to scale, if you try to do many things on your own.
• When you calculate the return, I would not combine your personal debt with the investing debt. Just make sure that the house you are buying makes sense as a stand-alone product, and the payment for the $40k you borrowed to do the basement is separate.

There's a one easy solution that will solve all your problem, and you will not do it, but here it is. Just sell your house, pay off the $40k for the basement, rent a house for your family, put some money to the side for the rainy day, and start investing the rest of the money out-of state. Study different markets, and fly to different parts of the country. Meet people who sell houses. Chances are they will be turn-key houses. Return will not be spectacular, but it sounds like the return is limited in your area anyway. 

I wish you the best with your success, and congratulations on taking the first step. 

This is obvious, but let the bank know that you are opening up a business bank account, not a personal account. Also, I think you need to set up your LLC first before you can open up a business account.

I rather use credit, so that you don't have to wait for the repair to get done, and by using the credit, you can choose your own person to fix. Credit is pretty standard, at least in IL, so I don't think it'll be a red flag.

Is this a rental or for your own home? 

Why did the income jump so much on year 3?

I used GMD in the past. The price and the quality was good. The granite selection is limited though. http://gmdchicago.us/