All Forum Posts by: Tom Markey

@Adriana Collado Hudak - As the comments illustrate, there is no "one size fits all" answer to this question.  It depends on your personal situation, risk tolerance, and future goals; and there are legal, tax, and practical implications (banking, financing, insurance, etc.).  If you haven't yet, start interviewing corporate and real estate attorneys in your area.  They are an essential member of your team.

Well said, @Greg Scott!  

@Hector Lewis There's no "one size fits all" answer to the LLC question. How you structure your business depends on your personal situation and future goals. Feel free to send me a direct message if you'd like to discuss your situation in more detail. However, my general advice is to look for an attorney in your area with experience in corporate and real estate law.

@John Gomez

Money spent on professional services is money well spent.  It will save you tens of thousands of dollars -- or more -- in the long run.  Look for an experienced corporate attorney in your area, perhaps at a smaller firm that focuses on business and real estate.  

Hi Jayson -- I would be very cautious about purchasing with a 2nd home loan if your intent is to use it as a rental (whether short- or long-term). Some might call that "mortgage fraud." Use the investment property loan, or try to find a seller who will finance the purchase with 10% down. Both of those options come with the bonus of being able to purchase with an LLC or other entity.

@Johnnie Schneider -- I'm not sure there's a right answer, but I'll offer my thoughts, and hopefully you'll get a variety of viewpoints in the forum.

I like @Tim Johnson's suggestion of saving up more money first because $25k is not a ton to work with, especially in south Florida.  If you don't want to wait, I would consider the following:

1. House hack a duplex or something with in-law quarters so you, your girlfriend, and the dogs have your own space.  

2. Buy a home with FHA or 5% down conventional financing in a market with short-term rental potential. Live there for a year, then move out and turn it into a STR. If you execute this well, you should have strong cash flow starting in year 2, especially if you can self-manage.

3. Do a BRRRR. Your $25k should be enough to get it done, though personally I would like to have more of a cushion in my personal reserves. This might not be a huge cash flow play, but recycling your capital (assuming all goes well) will allow you to buy more than one property with the $25k.

4. Look for seller financing opportunities where you can put 10% down, or less.

5. Embrace other no- or low-money down strategies and make your $25k go as far as possible.

If one of these options stands out to you, I would talk to a lender as a next step.  For example, some loan guidelines may not allow you to house hack a multi-unit property.  Feel free to reach out to my brother @Ross Markey, who is a loan processor at a well-known brokerage.

Best of luck!

When thinking about the "best" way to use a chunk of money, analyzing my goals usually answers the question.  So other than getting started in real estate, what are your goals?  For example, are you looking for cash flow or appreciation?  Do you want to be active, passive, or somewhere in between?  What's your risk tolerance?  What's your day job?  Where do you see yourself in 5 years?  Etc.

The "definitive" answer to the question of "Do I need an LLC" is "It depends." What are your goals? What other assets do you have? Do you have business partners? How will the business structure affect your financing plans? Do you have a spouse or children? Etc.

I generally agree with @Doug Smith. If you'll have 10 additional properties, an LLC probably makes sense. Maybe even multiple LLCs. If you are inheriting the properties, you may need to work with the attorney for the estate of the person who passed away to discuss how the title will be transferred to you, especially if you want to hold the properties in an LLC that hasn't been created yet.

If you'd like to discuss your situation in more detail, feel free to send me a direct message.  

Hi Jeremy -- I would review the lease, and assuming the tenant has breached it, begin eviction proceedings.  That's my general, non-legal advice :-)

Hi -- I'm looking for a tax attorney or CPA with experience and expertise in self-directed IRAs.  Any referral is appreciated.  Thanks!  -Tom