All Forum Posts by: Addam Driver

Hi @Dana Black,

It sounds like you've already made up your mind that you want your second deal however having a hard time trying to figure out which move to make.  I recommend you KEEP IT SIMPLE!  How do you do that?  Run the numbers and timelines.  Literally write out which scenario works for you, FOCUS and work like heck for your goal!  You can do it!  

Most of us investors have had financial issues, let a lot of time pass between deals, savings wiped out, etc.  Don't get discouraged or stuck.  You said it yourself it's just "a hard time".  The same boiling water that softens potatoes hardens eggs.  You've got this!

@Adam Burns

You got this man!  Congrats!

My wife wasn't all the way in when I started real estate investing.  She liked being the "contrarian" and I'm the optimist.  Long story short, I didn't listen to her and others who tried to plant the seed of "negativity".  If you've got a vision, GO WITH IT!  at least you will be able to back up your results with facts and not opinion or miseducation.   

Now... every last one of the people who tried to plant that seed want a piece in one shape or form.  Go with your vision, put your eggs in that basket and focus like hell on that basket.  You'll win either way.

Hi @Adam Burns,

Welcome to BP!

If the numbers make sense and you're comfortable with the area, then based upon what you've mentioned here I suggest you take the deal.

If you're buying for cashflow, then the $1200 a month coming in that should be WAY MORE than enough to cover your debt services (if there is any) and expenses.  I suggest rehabbing the 2 vacant units and get them rented.  I know completely how you feel.  My first rentals were 2 duplexes that closed on the same day.  All I had to go off of were numbers that worked and a vision.  Best investment I've made yet and making more.

I spent just over $60k for my duplex in GA.  So yeah... $50k on a quad that's already rented... yeah... you'll be good.

FANTASTIC!! Love the inspiration!  Kudos!

Hi @Sharon Tippett!

I started out with an LLC. I purchased my first rental property and did a limited warranty deed transferred it to my LLC. I'd recommend treating the LLC as a business. Get an EIN number, physical location address (other than your address), bank accounts, etc. You want to make sure it's hard for anyone to "pierce the corporate veil" so if anything happens at the property and someone wants to sue the owners, they can only reach the LLC and not your personal assets.

Selling the LLC is a good way to cut out the agent, a lot of paperwork, a lot of fees and do it in very short amount of time. I know investors who do this on a regular when they are doing flips. It's just easier.

The flip side is if you own the property inside of an LLC for over 2 years, it would be considered "aged" and normally by that time, credit has built up in the company. At this point the company would be able to stand on it's own quite well. Apply for car loans, credit cards, other loans, etc. Might be a good idea to keep the LLC just for that purpose alone.

Many options, but either way it's a good idea to have the LLC for bottom up protection.

Hope this helps!

- Addam

Hi @Tyler C.

Let's make some things clear.

The main strategy behind "house hacking" is to be able to get into a unit and rent out another.  The more specific reason is so that your mortgage will be paid by one of the other units allowing to free up what you would normally pay in rent to do whatever you want to with.  You can pay bills, save to re-invest, etc.  Additionally, you will get GREAT tax benefits.  All of this takes time, how much is completely up to you.

If you can afford to do this NOW, then do it!  If not, get yourself in a position to take better advantage of the plan.  DO NOT let your emotions do anything but drive your desire.  If you let it drive your decision making, it can turn out REALLY BAD.  

Don't get discouraged.  It's ok.  Based upon the information you gave, you can always aggressively pay down your debt in the next 6 months so you can qualify for a mortgage rate you can handle for 30 years.  

Here are some HIGH LEVEL numbers to keep you encouraged.  I purchased my first duplex for $67k.  Total rents are $1300 ($650pu).  Mortgage + insurance + taxes are $378 mo.  Each tenant pays all utilities.  If I were to move in, I would only be responsible for my utilities and about $400 (give/take) in mortgage and expenses.  My cashflow would would be about $900 or so.  With my regular job + an extra $900, I can pay down bills much faster and/or fix up my place, etc.

Stick with it. REI is a Marathon not a Sprint.

Hope this helps!

- Addam

Hi There @Arn S.,

You can always put your house into an LLC. However, it will only protect you IF someone sues the owner of the house for something that is related to the house which would be the LLC. However if they sue you personally, the LLC is considered an asset and can be accessed. The only SAFE way for you personally, is to get an umbrella insurance policy. That will protect you (to a limit) if you are ever sued.

There are other ways you can structure your business to limit the hit if you are ever sued directly.  This is a high level approach to protection.  Specific details are all based upon what are needed beyond this.

Hope this helps!

- Addam

Hi @Natasha Darius!

We up in hea!  I use to work at CBS in Television City.  Fun times!  Like you I'm working to get out of the rat race!  

-Addam

@Lisa V. you are very welcome!