First Deal - Need advice - Posted by Alan(KS)

Real Estate Investing
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Posted by Alan(KS) on April 12, 1999 at 19:49:20:

Thanks so much for the advice. Realtor can’t come up with the right key to see the inside, will let everyone know how it goes.

Alan

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First Deal - Need advice - Posted by Alan(KS)

Posted by Alan(KS) on April 11, 1999 at 21:49:08:

We have found a bank repo we are going to make an offer on tomorrow. We would like some advice on whether to take title in our name until we get Bronchick?s LLC course. Should we go ahead and take title in our name while we fix it up, then transfer to an LLC before we rent or L/O? What are the disadvantages of taking title in our name for a short period? Does this make you more vulnerable?

Particulars are as follows ? FMV 60-65K fixed, needs 25-30K repairs. Asking 40K (absolutely crazy), going to offer 15,670 (odd figure, learned that here! :-)). That works out to 10K profit, 4.4K holding and closing, etc. costs. Realtor thinks there is a good chance we would get it at this price.

Another question: Should we also consider transferring our personal residence to an LLC for additional protection? Advantages/disadvantages to having your personal residence in an LLC? Is there a better way to protect yourself from liability than a LLC?

Thanks for the advice! Hope to close our first deal soon!

Alan

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Re: First Deal - Need advice - Posted by Rob FL

Posted by Rob FL on April 14, 1999 at 17:07:39:

It is usually not a good idea to have your personal residence in an LLC for several reasons.

  1. You may not be able to take the mortgage interest and property tax deductions on your income taxes.
  2. You may not be able to get a homestead property tax exemption depending on your state laws. In Florida, this exemption is 25,000 from the value and can save you $500-$1000 a year depending on the millage rate.
  3. You may lose your homestead protection in regards to protection from creditors and bankruptcy.

Do some research and see a CPA.

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Re: First Deal - Need advice - Posted by JPiper

Posted by JPiper on April 12, 1999 at 14:45:18:

I’d check with your CPA before deeding your house to an LLC. This may not be advantageous to you.

JPiper

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Re: First Deal - Need advice - Posted by John(NH)

Posted by John(NH) on April 12, 1999 at 12:05:31:

If you’re getting financing you’ll probably have to take title in your own name before quitclaiming it to an LLC or land trust. If this is a short term flip, take title/quitclaim into the LLC. If long term, take title/quitclaim into a land trust with the LLC as beneficiary. Same thing applies to your primary residence. Bronchick explains it very well and I’m sure you’ll have plenty of time to read his course before you close!

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Re: First Deal - Need advice - Posted by Mike Oldfield

Posted by Mike Oldfield on April 12, 1999 at 07:06:14:

Focus on money making deals. At this point you dont have much to lose. Worry about asset protection when you have more on the line. At this point a good insurance policy is plenty. When you start worrying about how to take title and doing all of this research on things that are really not issues yet, you are taking away from your precious investing time. Some of the ideas on this site are strategies which fit very narrow circumstances.

Try to find a strategy to fit your situation not a situation to fit your strategy. Invest in money making deals. The fancy stuff will come later.

Good Luck Write Anytime

Mike Oldfield