All Forum Posts by: Todd Rasmussen

@David Cianci

It's a distraction from your first deal. Don't worry about it. We have quitclaimed property into llcs and left loans in our personal names without issue. If the mortgage is getting paid, usually banks won't worry about it. Usually creating a llc has net zero or an increase in overall taxes paid, so I don't know what benefit you are imagining from creating one. Have a substantial liability insurance amount and worry about an llc down the road while you are saving up to buy another.

@Kurt Baltutat

I think the minimum bedroom dimension is 7' x 10' and you need a window large enough for egress if it's going to be a bedroom. On flips, we don't find pushing that envelope worth the added liability if someone finds out that it's not a legal bedroom. I think you keep it as an indoor laundry and have a great 3/2 instead of a weird 4/2. I'm also not familiar with the market in Knoxville, so let me know if that ends up being bad advice.

@Monir Badeer

That's exactly how we got started. Network, Network, Network.

@Sean Tong

Go knock on doors, meet your future neighbors, and ask directly. People love talking about what they got a builder to add.

@Will Trammell

Congratulations on number one. We started with property management and don't think we'll ever stop. I do plenty of things myself, but I enjoy not being on call all the time. Couple ways to size an umbrella policy, 1 is to analyze your assets and do it based off that, but I have always preferred to do it based on what is an amount that guarantees my insurance company would want to defend me. 1 million to start is pretty popular.

@Shane Duncan

If you have any friends in the business you can pass capital through them to create an added layer of separation as well.

@Vi Prich

I think your gross rental margin is enough to justify keeping it as a rental. Just keep placing new tenants and every year with fixed mortgage amounts and increasing rents will feel more comfortable. If this experience has left you soured on owning rentals or you need to take advantage of the step up in cost basis, you can wrap your existing mortgage and sell and then you wouldn't have to feel like you wasted what is essentially now a 5 year principal only loan.

@Eric Rice

What type of investing are you planning to do? Long distance and first investment I'm assuming you're looking at rentals, in which case I'm not sold on Franklin. Franklin is a beautiful town that everyone wants to live in, but as a result prices are very high and I'm not sure you are going to get as much of a return as you could on the other side of Nashville. We have scaled in SFH rentals in Clarksville to the point we "retired" last year and moved out here from Los Angeles to do it full time.

@Courtney Rodes

If interest rates are going up, then the principal amount has to go down in order to have positive cash flow. Decreasing the principal of the refinance means you are leaving money in the deal or lowering your holding costs, rehab costs, financing costs, or acquisition costs. One variable doesn't put an entire strategy out of business, it just means you have to adjust a different variable. In our case, it's finding properties for lower acquisition pricing or on creative finance terms that allow them to cash flow still.

@Chris Charlton

We use state farm. You can review the estimate they used to come up with your coverage amount and might find they have some input wrong. Insurance coverages vary slightly state to state, but in CA, IN, TN, and KY they can write ACV polices too, although at that point, just going self insured might make sense, you are getting pretty close to the number when people start to consider it. Ask a contractor the cost /sq ft to build and compare that against your coverage A divided by sq feet. as an additional check if you are concerned.