Could someone here spoon feed me the process of acquiring a rental property? I have money to get started. just tell me where to find anything i can rent out at a decent rate, the capital i require to start with it and any laws i need to be mindful of.
Could someone here spoon feed me the process of acquiring a rental property? I have money to get started...
Isaiah Howard
David Morales
bump
Ian Brown
You need to start an LLC with an S election, for tax purposes. You'll be able to write off losses on the house like a business expense.
I would suggest also outsourcing the property management to a professional company that will vet and collect the rent from the occupants. You don't want to waste your time doing that yourself.
Not sure how much money you have, so I can't really tell you what kind of property to buy. But something that would be smart to do, is get a bank owned property, or property that is damaged at a lower price and put in the time and effort to kind of "flip" the house, but rather than sell it off, just rent it out.
to find a property, you're going to want to look in areas of the country that don't have volitile markets, like california. If you buy a house in california, where it's volitile, you'll eventually lose when another crash happens.
If you buy a house in a place like san antonio or houston (good markets) the prices never fluctuate greatly, so you won't run the risk of a devalued property.
Hunter Harris
I would suggest looking in san antonio, it was never affected by the housing collapse, and the texas economy is strong. Houses are affordable and even young people can afford to buy them.
There are also 3 or 4 military bases in the city, where people from all over the country will be moving there, but not able to settle down, so they'll rent rather than buy. If you really want to get the best bang for your buck, mutli-unit is the way to go. If you can get a good deal on a property that has 4 units, you'll have pretty decent income from that.
If you're buying cash, there really isn't a lot to it because all you have to look at is the rental price in the areas youre looking to buy in, and see if the return on the rent will be outpacing other investments you can do with the money.
If you were smart, you'd pull out loans on the properties so you can stretch your money even further and purchase even more rental properties.
I work for a company that actually sells rental properties with renters already in them, so I'm sort of familiar with the processes
Alexander Jenkins
Wtf lmao.
Just go buy a house and start renting it out user. Then do your taxes through TurboTax. It's not complicated unless you're a slumlord
Logan Kelly
don't listen to this guy.
You need to set up a company so you can get tax breaks and protect yourself. If you just rent out a house to someone without setting up a company, you can get sued for someone getting hurt on the property, including repairment etc. You will be personally sued, rather than just your company.
DO NOT do it without a company
Elijah Evans
You buy homeowners insurance dumbnuts
Sebastian Gonzalez
FYI I'm spewing shit because this is a stupid question but this guy clearly has no fucking clue what he's talking about lmao
Jace Hill
he's right.
homeowners' insurance doesn't cover you if you're not living in the home.
you're also right.
liability insurance will actually protect you when you get sued. Forming a company probably won't do anything.
Easton Diaz
Forming a company will protect yourself. They can sue your company for all it's worth, but they can't send you into personal bankruptcy, which is important. The LLCs act as an actual person and shift responsibility away from you.
OP just get the proper insurance for your house to cover the house and your lost income if the renters burn the house down somehow, and buy the house with an LLC.
Eli Thomas
Jesus Christ why are you getting sued are you filling the house with dead rats?
Op maybe you shouldn't ask this shit on an Indonesian bird watching forum
Nathaniel Butler
yeah, this is what a lot of people that don't own businesses believe.
it will protect you from liability incurred by the business, not liability you incur in the business's name.
I don't care that you're mistaken, but nobody should take anything you say as actual legal advice. You're a bit stupid.
Josiah Morris
I got 23k, so this leaves me in an odd spot
I originally wanted to get into mobile home parks but the cheapest ones are just out of my reach (with a mortgage). Are there parks out there with less than 10 units? I look online and only see a single page of listings for my state. Where do i find more? Do I just head into town and find a broker?
William Campbell
Also, is buying multiple properties with single mobile homes and renting them just as good?
Brayden Brown
That is literally the point of forming a company. How do you think the owners of Enron are still rich? Yeah they got jail time for criminal acts, but they weren't affected personally financially.
I literally work for a company that sells rental properties to people. I know what the fuck im talking about.
23k, isn't a lot, and I don't really know much about mobile home parks, I imagine it works with the same principles. As for where to find them. Yeah, id say go find a broker, they'll have access to the MLS, so they'll be able to find you more information on the parks
Gabriel Gray
how much would liability insurance cost?
how do i form an LLC?
James Morales
And I'm a financial advisor at a fortune 500 who operates clients personal and business accounts. You don't need a business for a rental property you autist.
Do you even own any property yourself?
Btw grats on the secretary job at a real estate firm, I was thinking of hooking my retarded sister up with one, how do you like it?
Ryder Watson
OP do your own research for God's sake. This guy's a retard
Juan Wilson
My dad works at nintendo too, thanks for the input
It's cheap to start an LLC, like $400. You file the forms with the state you want to file it in. Nevada is usually the best place to file it because it has no state income tax
Carter Turner
liability insurance will cost you a couple thousand dollars a year for each house in the US.
It's fairly expensive because landlords get sued a lot. And contrary to what the other user is saying, an LLC won't protect you from being personally sued particularly if you're the only person in your company.
Elijah Price
legalzoom.com
>the owners’ personal assets such as cars, homes and bank accounts are safe.
Evan Johnson
But it will save me money in taxes, right?
Thomas Myers
like I said, talk to a lawyer.
your assets are safe from business liability but not from personal liability you incur running the business.
It WILL protect you completely if you don't also run your business.
but that's not exactly what you're suggesting, is it?
Matthew Ramirez
google.ca
#2
No FI is going to offer a mortgage to a brand new corporation which has nobody to be held liable.
A mortgage is a contract. Put two and two together.
/retard
Lucas Carter
um sort of.
it's a deductible business expense if that's what you mean.
so it saves you on taxes because you'll make less money.
Owen Carter
>And they are liable if they are sued for their own wrongdoing
>If someone files a lawsuit accusing you of wrongdoing—whether it’s negligently maintaining your building, wrecking the company van or defrauding a customer—your LLC won’t protect you from personal liability
im guessing the first is what most landlords get sued for, so if im a 1 man army, im still liable
Lincoln Roberts
to be fair your liability insurance won't cover most of that either.
know the law, and don't break it.
Justin Sanchez
You actually think LLCs can't own properties? OP said he has cash to buy property, which means there might not be any mortgage contract to sign
Nicholas Gonzalez
his point still stands.
even if he isn't under contract with a bank he's still under contract with his lessees.
It's probably a moot point though.
>Landlord LLC owns apartments worth $1.5 million
>Landlord LLC incurs liability with a renter
>renter sues Landlord LLC and places a lien on its assets
Your personal assets may not be at risk, but the business assets are. And even with most sole proprietorships the business assets are the only ones worth suing against.
unless you happen to be a multimillionaire already you've got nothing worth protecting except your business. Using it as a shield to hide behind doesn't give much protection when it's literally your most valuable asset.
Jose Nelson
I do think businesses can own properties. But no respectable FI will lend to a brand new one with a 23k down payment and no collateral.
Yeah 23k down. Because that's what OP has. Scroll up you bafoon.
You want some proof I know what I'm talking about? Business mortgages won't be federally insured. Businesses have to pay higher interest rates because of that among other reasons. On a 200k mortgage (assuming an FI would accept 23k down for it - it wont) that 1% interest increase will cost OP $100 more monthly on a 30 year mortgage. That's 36k more over the course of the loan. That means OP wont profit for another 2-4 years. And then if he pays all these extra insurances and legal fees you want thatll extend it to 4-6 years. You're not giving good advice you're just a secretary for a salesman. Go read a fucking book.
Jacob Bell
Well no shit the company assets are always at risk. Luckily, smart people protect themselves in smart ways. If you own multiple properties, there are series LLCs which you can essentially place all of your properties in one LLC but each property acts as though its in its own personal LLC, so only that one property is at risk
Thomas Barnes
>so only that one property is at risk
true, that would be a valid use.
any time you have multiple businesses.
it still won't protect those multiple businesses in the event you're personally sued for any liability you personally incur.
Chase Long
>Yeah 23k down. Because that's what OP has. Scroll up you bafoon.
I read that, who knows, that might be enough? he's looking to buy a trailer park you bafoon. I have no idea how much those cost, that might be enough
Cooper Campbell
Nothing would protect you, so why fight against getting an LLC? the LLC is easy to set up, and will benefit you in many ways, including taxes. Everybody on here is being fucking difficult just to flex the fact that their daddy works at a mortgage company.
GET A FUCKING LLC
IT WILL HELP PROTECT YOU
IT WILL GIVE YOU TAX BENEFITS
Jeremiah Collins
just saying all of the protections of an LLC are already there in your various liability insurance policies.
I'm not aware of any tax benefits over a proprietorship aside from being able to write off the incorporation fees. Which isn't really a benefit at all.
Sebastian Foster
cheapest one I saw was 144k
Im just shy of being able to afford it assuming i can get a mortgage with 80% ltv
but
>only 8 listings on the page
ill see how many more i can find at a broker
Asher Nelson
What's an LLC mates
Blake Ramirez
>IT WILL GIVE YOU TAX BENEFITS
do you mean like this guy here says:
>You need to start an LLC with an S election, for tax purposes. You'll be able to write off losses on the house like a business expense.
because that's some retardation right there.
does he honestly think a sole proprietor isn't allowed to write off business expenses? Fucking retarded.
all that's required to write off business expenses as an individual is a Schedule C attached to your tax return.
Cooper Edwards
Limited Liability Corporation.
You basically own your own buisness so you can write off all expenses rather than that just coming straight out of your pocket.
Like, if you need a new roof, that's a write off. Foundation repair? write off. Anything that might relate to the property
the biggest thing will be figuring out how many units are on that property, and how much they will pay, so if you do get a loan or preferably an investor, you'll know how quick it pays off
James Hall
Hate to break it to you but you haven't factored in closing costs (appraisal, legal [not retarded LLC shit]), doesn't look like you have enough of a down payment brother.
Have you considered buying a condo or apartment?
Jaxson Sanders
Nigga you get to write off tax expenses you still have to pay for shit. Get the fuck outta here.
David Kelly
>You basically own your own buisness so you can write off all expenses rather than that just coming straight out of your pocket.Like, if you need a new roof, that's a write off. Foundation repair? write off. Anything that might relate to the property
yes, all of those things can be done without an LLC.
it's called a sole proprietorship.
anyone can do it, you don't even have to register the thing.
James Davis
>Have you considered buying a condo or apartment
maybe. shouldnt 4 units in mobile homes be cheaper than 4 units in a fourplex though? the one MH park i saw online had 12 units, so it's easy enough to just find a smaller park
cap rate said 18%. does $475/month sound like an exaggeration?
Christian Perez
Okay, so if you claim theres no protection benefit and no tax benefits with an LLC. Why the fuck do you think house flippers and rental owners use them? Just for shits and giggles??
Luis Morgan
I didn't claim that.
I specifically agreed that they protect people from business liability they didn't themselves incur.
whether that's a manager that forgot to put salt on the sidewalk in winter or a building that burns down and kills someone.
it just doesn't offer the kinds of protections you claimed, and afaik it doesn't offer any tax benefits over a proprietorship.
Nathan Russell
Flippers employ people you mong. Rental owners don't use them unless they own a whole (apartment) building or something. OP doesn't have the capital to justify a LLC because he doesn't have to worry about having too high a tax bracket on his personal income if he only has 23k saved up.
I like the part where you skipped over my profitability projections a few posts up btw.
Liam Walker
If the company goes bankrupt you are personally liable as a Sole Properietorshit
As an LLC, they can't touch you. Yes you pay some expenses for that.
Tyler Allen
true, but that only matters if you hold assets worth protecting that aren't also owned by your business.
again, talk to a lawyer, but most people just starting out like OP don't have anything to lose in a BK anyways.
Personally I'm a millionaire, but almost all of my assets are business assets. So if my business goes under I've got nothing left to protect.