All Forum Posts by: Zachary Bush

@Rob Saxelby Another widespread path taken for small investors wanting the best possible loan options is to purchase the property as an individual and then, after closing, transfer the title into an LLC. As your portfolio grows your options expand and more lenders will want to work with you in the LLC. Not taking anything from the lenders on this issue, they gave great advice also, it's just that most first-timers don't start in an LLC.

I was anxiously awaiting your reply to this long thread as I imagined you would be shocked. 
From what I've seen this is rare.

The biggest problem I've seen on this thread is limiting beliefs. 
The one strategy you used/seen in your specific markets is the only strategy that works in all use cases and all markets. Any other strategy? Well, that's either not correct or not smart.

Two things to consider:

1) Respect variables. There are sooo many factors that make one strategy more efficient than others.
Plans for the home (minor touches, "to the studs", make it glamorous), condition of the home, its price in comparison to comps in the area, credit score, personal goals and fears (big factor), plans for children such as college, terms of the sale, trust in your inspector and your team, your workload, your current medical health, your stress tolerance, tax benefits, your family's stress tolerance, area's growth, your trust in the seller's disclosure, offers on the table, current interest rates...you get the idea.

2) One of the most beautiful formulas (besides Euler's Identity) is:

Interest = P (Principal) x R( Annual Rate %) x N (Time Period).

One point of view is, yes, you borrow money but you pay less out of pocket and you just pay a small amount per month and you can keep doing this for other homes. Yes, you're in debt but you have monthly rental income!
Another point of view is a $200k loan at 7% interest on a conventional 30 year means you pay $13k in interest for the first few years (Total interest of $279k and total cost is $479k). This is why that formula is beautiful. Why am I just giving my money away?!

The author of Rich Dad, Poor Dad stated he doesn't use any of his money and emphasizes to "use other people's money, stupid."

So which approach to use? 
It depends on all of the variables and what you're trying to do. Both loans and cash paying are one of the many, many tools to fulfill your goals and situation. Is cash king? Not all the time. HELOC, 1031, refinancing, lease to own, etc. are all available tools.
So think if you have Let's move away our limited / "blinders on" perspective and analyze all the available chess moves.

Thanks,