All Forum Posts by: Wade Sikkink

@Marc Dufour Here's another consideration....

Maybe he's turned his life around, maybe he hasn't. If he's on a 1 year, pre-paid lease and you find out 2 months into it that he's doing drugs in the property, you are stuck. You won't be able to get rid of him for 10 more months.

I believe that people are not defined by the worst thing they have done in their life and that people deserve second chances. However, if you give him a chance, protect yourself also and put him on a month to month lease so that if he does have a problem you can get him out.

Good luck.

A bank should have no issues lending to a LLC, but they will want it to be a commercial loan with commercial loan terms (ie, 25%+ down and 20 year or less term). They also shouldn't need a personal guarantee. The loan is secured by the asset (property).

Of course, it will depend on the relationship you have with your banker.

@George P. Yes, one guy didn't sign the new lease. He's a lawyer and I think somewhat of a professional tenant. He's in the process of building a house and will be out this summer so I didn't fuss about it too much. The new lease for the others was only for a few months, so they will all be month to month soon.

We bought a 14 plex that was fully rented. The day of closing we delivered a introduction letter that explained who we are and that our goal was to make this a great place to live. We also told them in the letter that we would be coming around the next Sunday afternoon to meet everyone and have them sign a new lease with us. At the bottom of the letter was a section where they could write down anything about their apartment that was an issue or needed fixing.

After the tenant meetings we quickly fixed the few major items identified by the tenants and it's been a smooth transition.

@James Wise Good point. LLC or not, you must have adequate insurance protection.

However, to nit pick a bit, none of this with PREVENT you from getting sued, they will, rather, protect you from personal loss if you do get sued. Good management practices and good tenant screening is what will help prevent you from getting sued.

Buy the property then have your real estate company lease the car. It's then a business expense. The property cash flow covers the payment and the lease payment comes off your taxes. Win, win.

The one thing I can absolutely guarantee about any forecast is that it will be wrong. I look at local trends and forget trying to predict anything on the marco level. Looks at schools, building permits, foreclosure rate, talk to other landlords about rental demand, etc. Then run your numbers realistically and make sure you can weather a storm if one comes.

For me personally, I wouldn't buy any rental property without setting up an LLC. However, the opinions on this subject are wide and varied here.

@James Dow My folks lived in Riverton for about 15 years and just moved to Bozeman last year. I agree with @Jerry W. that the ship has probably sailed on the easy opportunities in that area. It's not Williston, but the gas boom as really affected the area. Also, the fuss going on about expanding the Wind River Reservation would make me leery of jumping into something there.

There's some good ideas above, but how about this? Take a look at Laramie. My first multi-family investment was a 4plex across the street from a college campus. College students have their own issues, but my experience was that they were generally pretty good about paying their rent. I don't know much about the market in Laramie, but it might be something to look into.

Good luck.

@Account Closed Perth is awesome. I was there back in my Navy days. Really liked it.

I think your plan can certainly work, just make sure you over budget for maintenance and management. Properties in that price range are going to have ongoing maintenance issues and tenants that rent that type of property don't tend to the the easiest tenants to have. Put everyone on month to month leases so that when you find out someone is smoking meth in the property, you can get rid of them quickly.

Good luck.