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re: Real Estate Investing......... New update pg 7
Posted on 2/18/15 at 11:02 am to I Love Bama
Posted on 2/18/15 at 11:02 am to I Love Bama
quote:
Assuming that is his full time job?
Nope. He owns his own small Architecture firm. It's probably 50/50. He's got a small crew to do most of the big construction and when I was in College he had me too. lol. He is also a GC, so he does all of the work himself.
quote:
In all seriousness, is he just balling out of control right now?
He does pretty well for himself.
But he got there all on his own man. We were no where near well-off growing up. He and my mom lived in a 1,000 sf house for 20 years of which I spent 12. I remember the first property he ever built was a duplex. He put dishwashers in them. We didn't even have a dishwasher at the house. He told me the reason that he and my mom struggled early on in their careers is so we didn't have to.
1
Posted on 2/18/15 at 11:06 am to LSUengineer12
quote:
But he got there all on his own man.
This is pretty much the same boat as my dad and he is helping me get off the ground with my investments. I enjoy hearing stories like that as they hit close to home.
Posted on 2/18/15 at 9:48 pm to stevengtiger
i hope you understand most lenders will not give a loan to an LLC for residential property.
You would have to transfer title through a quit claim deed to the LLC AFTER you buy property.
ALso remember once a lender finds out you switched the name they MAY have a DUE ON SALE clause which demands full payment of mortgage right then and there.
You would have to transfer title through a quit claim deed to the LLC AFTER you buy property.
ALso remember once a lender finds out you switched the name they MAY have a DUE ON SALE clause which demands full payment of mortgage right then and there.
Posted on 2/18/15 at 11:06 pm to Fat Bastard
Many people keep the properties in their name and get an umbrella policy for liability.
Posted on 2/18/15 at 11:12 pm to Fat Bastard
quote:
i hope you understand most lenders will not give a loan to an LLC for residential property.
why not
Posted on 2/19/15 at 4:52 am to ChiefBowman
quote:
why not
The same reason people have an LLC in the first place. It limits the financial liability of the individual and insulates them from financial responsibilities should something go dreadfully wrong.
Banks won't have anyone to go after, the LLC will just dissolve.
Posted on 2/19/15 at 5:35 am to KosmoCramer
quote:
Banks won't have anyone to go after, the LLC will just dissolve.
I have several pieces of commercial, all in separate LLC's. My lender has never balked and has the property as collateral. I have two residential homes the same.
Posted on 2/19/15 at 6:21 am to Fat Bastard
Banks will loan on residential properties to an LLC, it will just be considered a commercial loan with commercial terms...larger down payment required, higher interest rate than a personal residence, etc.
Posted on 2/19/15 at 8:17 am to Fat Bastard
I have already met with my banker and he assured me that loaning to our LLC will not be an issue and in fact he recommended it. He is RE investor as well. We already have established a pre-appoval for mortgage loans, dual purpose loans for rehab homes and a line of credit with the bank. Am I missing something?
ETA:
We got approved with the understanding of 20-25% down with a rate around 4.7-5.0%. The properties we are looking at still cash flow pretty well with conservative rent estimates and these numbers.
ETA:
quote:
larger down payment required, higher interest rate than a personal residence, etc.
We got approved with the understanding of 20-25% down with a rate around 4.7-5.0%. The properties we are looking at still cash flow pretty well with conservative rent estimates and these numbers.
This post was edited on 2/19/15 at 8:20 am
Posted on 2/19/15 at 8:28 am to stevengtiger
quote:
I have already met with my banker and he assured me that loaning to our LLC will not be an issue
WOW. run with that like you stole it then.
This post was edited on 2/19/15 at 8:38 am
Posted on 2/19/15 at 8:31 am to ItzMe1972
quote:
Many people keep the properties in their name and get an umbrella policy for liability.
was just about to post this. It's probably what i will do with my properties. I doubt i transfer title through quitclaim deed.
Posted on 2/19/15 at 8:33 am to Martini
quote:
I have several pieces of commercial, all in separate LLC's.
commercial is not the problem, people buy commercial all the time with business entities. it's the fact most will not let you get a residential loan using an LLC. the ones here who have done this pulled off a nice deal. However i would not do it for higher terms. Could always transfer adter the fact so you are not stuck with higher terms( if it was packaged as a commercial loan for a residential property). or Just get a umbrella liability policy.
This post was edited on 2/19/15 at 8:44 am
Posted on 2/19/15 at 8:44 am to Fat Bastard
Why transfer via quitclaim? Just do a contribution to the LLC. Quitclaims transfer any interest you may have in the property. If you purchased it, you clearly have an interest. No reason to use a quitclaim.
Why do this after the loan and risk the bank calling the loan?
Acquire the property in the LLC and sign a personal guarantee at the time of the loan.
If the LLC was just formed for the parking of the real estate, the bank is running your personal credit for the loan anyway.
Why do this after the loan and risk the bank calling the loan?
Acquire the property in the LLC and sign a personal guarantee at the time of the loan.
If the LLC was just formed for the parking of the real estate, the bank is running your personal credit for the loan anyway.
Posted on 2/19/15 at 9:01 am to NEWBIE
quote:
If the LLC was just formed for the parking of the real estate, the bank is running your personal credit for the loan anyway.
This is exactly what they did with us. My dad was the guarantor and they ran all his financials before giving us the ok but we had no problems. He will have to sign the personal gurantee when we aquire our first few deals.
Posted on 2/19/15 at 9:20 am to NEWBIE
quote:
Just do a contribution to the LLC.
tell me more, but I'm still stuck with higher terms? meh. Or is this some type of transfer after buying in my name? So i am not stuck with higher terms??
quote:
Why do this after the loan and risk the bank calling the loan?
exactly what i warned him about if transfer was done through quitclaim above. I'm very glad i haven't done that yet. I'm sticking with umbrella liability after my next purchase this year hopefully.
This post was edited on 2/19/15 at 12:38 pm
Posted on 2/19/15 at 9:44 am to I Love Bama
Ilovebama and others, what would be considered a good rate of return on real estate investment?
I have something I am looking at for 80K, a few blocks from LSU (bad side though). 1 bedroom house in good condition, grad student just signed a year lease for $800 a month.
I have been informed about it before it hits the market and would need to act now, but I don't feel like I have had enough time to research real estate to decide if this is a good investment. Any info would help.
I have something I am looking at for 80K, a few blocks from LSU (bad side though). 1 bedroom house in good condition, grad student just signed a year lease for $800 a month.
I have been informed about it before it hits the market and would need to act now, but I don't feel like I have had enough time to research real estate to decide if this is a good investment. Any info would help.
Posted on 2/19/15 at 9:58 am to jsquardjj
quote:
Ilovebama and others, what would be considered a good rate of return on real estate investment?
I'm getting between 20% and 30% return annually based on my annual PCF(after subtracting PITI, management expenses if any and you can factor in vacancies and especially maintenance) versus what i put down on the property(not counting closing costs as that is not equity) when i purchased it. Of course those percentages will go down if you do a cash buy. While you will have more PCF you had to put a lot more into the property upfront. nothing wrong with that. I don't want too many leveraged properties so hopefully before long i will be doing cash buys.
Posted on 2/19/15 at 10:01 am to jsquardjj
quote:
I have something I am looking at for 80K, a few blocks from LSU (bad side though). 1 bedroom house in good condition, grad student just signed a year lease for $800 a month.
I have been informed about it
I wouldn't take less than 350 a month PCF. better run your numbers.
Posted on 2/19/15 at 10:08 am to Fat Bastard
quote:
I wouldn't take less than 350 a month PCF. better run your numbers.
I also would take a hard look at the area. If you only have a one year lease signed, be sure you will be able to rent it our again to a decent tenant or you will be paying for a management company to find you one at 10%.
Posted on 2/19/15 at 10:10 am to Fat Bastard
One bedroom places are the ones that I avoid. After years of trying to make them work you will realize that 1 bedroom properties turn over a lot more than 2br or 3br. One baby or a new girlfriend and you are vacant. Close to LSU?? how big is the lot?? That may be the play in a few years...
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