Using the comments feature provided on each article is a great way to get a good public discussion going, but if you prefer to contact me directly, I’m more than happy to do so. Simply email me at info@investfourmore.com.
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- 950: The Easiest Way to Invest in Real Estate in 2024 w/Terrence Terrell
- 949: Seeing Greene: Is Losing $800/Month in Cash Flow Worth $200K+ Equity?
- 948: 10 Rentals in 5 Years by Buying in Overlooked Short-Term Rental Markets w/Jarrod Tucker and Yiwei Cheng
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- 946: How to Supplement Your Income with Real Estate (So You Can Do What You Love) w/Juliet Lalouel
- 945: Seeing Greene: Stolen Properties and Why Your Rate Doesn't (Really) Matter
Invest Four More 
How do I find this in my area?
Hi Maureen, Are you referring to a portfolio lender or something else on the blog?
Hi Mark,
How do you protect your properties? Do you put each one in land trust? Do you use LLC? I’ve spent a long time reading on the topic & very confused at the end. My understanding so far:
– Purchase using a land trust can provide protection as the beneficiary is confidential. But banks do not lend to a land trust (unless one use commercial loan with much higher interest), insurance is many times higher too. So, to be cost effective, one needs to do a cash purchase. But the one can’t refi/cash-out when the property is in a land trust.
– If one purchased with conventional loan, then transfer to a land trust or LLC, one is said to leave a paper trail in the title chain.
– If a land trust hides one identity, then why would one need to use a LLC as a beneficiary?
Looking forward to hear your thoughts and advice.
Linda, to be honest I don’t know much about trusts. I talk about how I place my properties in a seperate LLC in an article here.
I use the LLC to protect myself against possible littigation, not to hide my identity. Trusts are something I see used quite a bit and I need to do more research on them to see exactly how they work. As a Realtor I think every offer I have seen from a Trust has been cash.
Linda
Having owned several hundred scattered properties over the years, once I reached a certain number, I used outside management, although my crews handled most repairs and 50% 0f leasing. I’m not sure if you are only working with single family, duplexes, or fourplexes.
I also don’t know what income level you focus on> When the current permanent finance market drastically changes in the next 3-4 years, you will be OK on your holdings, but acquisitions will change.
I must admit that, while profitable, I never had a 24% bottom line. My repairs,after the first 2-3 years, were 30-35%. It becomes hard work to own a significant number. Except for this recent period, which is almost over, my single family almost always had a negative cash flow.
Over time, I did this in five states and I agree that real estate ownership is one of the better ways to accumulate value using the lender’s money. And I don’t know what market you’re in or outside income. I wish you well on this venture. With determination and allowance for unexpected, sudden shifts (significant drop in dollar
value and equal drop in standard of living) you may reach that goal
Charles Bussey
Thank you for the comment Charles. I am an in Northern Colorado and on the surface our market may not have many cash flowing single family homes, but I feel any investor can find deals in any market. The key to my high returns is buying properties below market. I never buy properties with negative cash flow, my SFR’s cash flow over $500 per month on 80k to 120k purchase prices. I plan on starting my own Property Management company when I get to 10 and letting them take over management at that point.
Mark,
I enjoyed your blog very much, especially your energy and drive. You are about where I was 10 years or so ago. My son and I now own three small companies that provide total turn- key investments to local and foriegn investors. Seems we could never find the right contractors, realtor or management companies, so we created them ourselves. We have even started our own REIA. Our small group of companies support over a dozen families and still make a very good living for my son and I. We are now concentrating on our Internet strategy and video marketing plans.
Keep up the great work and if you would ever like to talk about business, just give me a call at 904-813-9526. Our websites are belowwholesalehousing.com and locklearrealtyllc.com.
Thanks!
Joe Locklear
Jacksonville, Fl
Thank you Joe! It sounds like you have it figured out. I know a couple investors who hire full time crew to do maintenance and repairs. The more control you have of your contractors the better, but you have to make sure you’ve got enough work for them. The more companies you can own the more profits and usually you can expect higher quality work.
That’s very close to what I would like to do eventually. I am planning on starting a property management company soon.
Hi Mark,
Is there a good calculator or program you can recommend to analyze deals and keep things straight? Ken from NJ
hi Ken, Thanks for the message. I used to use an online program that kept track of every possible financial figure, but I realized I knew what a good deal was without using it. I stopped paying $20 a month and just rely on simple math calculations I do by hand or in my head.
There are many online programs that will calculate ROI, ROE, Cap Rate, Cash on Cash, etc.
The only ones I really care about is cash on cash and my equity position. I want to make sure I am making money and have plenty of equity if I need to sell or refinance. Everyone has different figures that are important to them and it may be useful to have all those different financial tools. I would do a search for free rental calculator and you should get plenty of results that will give you everything you need.
I have been on the prowl for a program that will calculate my returns from the snowball method of paying off one rental at time, but I have yet to find one. All my ten year projections have been done by hand which can take a while.
Thank you for writing such an informative and inspiring blog. I currently live in Southern Colorado in a community (Pueblo) that I believe provides an excellent opportunity for investing with your strategy. I previously had been a licensed realtor in Colorado and in Illinois but have been inactive for several years as I am now a stay-at-home mom of 3 small children. I am looking for advice as to whether I should reactivate my license as an independent broker with my “own” brokerage firm or just to sign up with any of the local companies if I plan on just looking for my own properties (for now). Also, I am curious to how you found your portfolio lender. Although I am from Denver I am relatively new to this community and am sort of “scared stiff” about buying a property in a new area that I am not so familiar with and am suffering from a bit of analysis paralysis…Thanks very much for your time! -AJ
Hi AJ, Thank you for the comment and I am glad you enjoy the blog.
AS far as the agency question I would probably sign up with one of the cheap agencies that don’t give you much support or help if you just want to buy properties for yourself. You can work from home and I don’t think the cost much at all, but I have not looked into them much. There is a lot involved with running your own brokerage even if it is just you.
I found my Portfolio lender through work of mouth and and other Realtors.
It can be tough buying in a new town. I would definitely do a lot of research on values and rents in the area. Analysis paralysis can be a bad thing, but if you are new to an area I don’t see any problem with taking your time to make sure it is the right place to invest.
Hello Mark,
I read your comment on linked in saying you are looking for rentals this year and you are experiencing 24% cash on cash returns. I think you would benefit from picking up properties in the Texas market namely San Antonio and the surrounding areas. I am currently picking up 20-30 properties a month. I have everything you need from contractors, backend real estate agents, and property Managment. The last couple that invested in one of my properties is pulling 700 a month in cash flow, and that’s on a house they finance. Lastly I can take care of all your funding and holding needs with landlord programs funding 65% of the ARV, because I believe you said you use all separate Llc. Which I might add might not be the best decision in some instance (my lender and the owner of my company advised against it). Anyhow, would love to speak with you about investing in Texas when you get a chance.
Thanks
Joel Phillips
210-606-5238
Ps- I know I can help you hit your return and goal faster if we possible work together!
Hi Joel, I have heard the Texas market is great right now for rentals. I am not to the point where I am looking to invest in different States, but I may in the future. I know some banks may have a due on sale clause if ownership is transferred to an LLC which is a great point you bring up.
What are your thoughts on town homes? As a beginning investor in the Tampa, Fl area, single family homes in decent neighborhoods are a bit pricey. However, very clean and somewhat affordable townhomes are available in good neighborhoods that are within budget. If cash flow is king, then why not townhomes as an option? What I am finding right now in this area, with my limited budget, townhomes might be my best option if cash flow is my main objective. What are your thoughts? I cannot find too much stuff to read about my idea on the Internet. It seems that town homes are rarely mentioned because of their resell value later down the road. I know single family homes resell better and tend to appreciate more but I just cannot find too many ones in our area that produce positive cash flow like town homes. Thoughts/suggestions on the pros/cons of my idea of town homes?
Thanks and I love reading your articles btw.
Kind regards,
Jeremy Forrest
Thank you Jeremy! Sorry for the delay, but I have been moving all weekend and have not had a whole lot of time!
I think you should invest in whatever makes you the most money. That’s easy to say since there are so many variables that go into Real Estate, but I know an investor around here only buys condos or town homes and he does great. You need to make sure you are factoring in HOA fees, but if your biggest concern is cash flow, like me, then I think town homes might be a great option for you. Some HOAs have regulations about renting, so make sure you check out the covenants thoroughly.
Since you have a separate LLC for each property, does this mean you started out only obtaining financing from a portfolio lender? You never went the traditional 30 year mortgage even for the first few properties? And, does your portfolio lender lend to the LLC’s without too much hassle? Do you basically factor in the cost of the LLC in the acquisition cost for each property? Also, does this give you tax advantages since you are running as an LLC vs buying properties in your own name? It seems like a lot of investors are buying in their own name because of financing issues with the LLC and the cost/paperwork.
The first rental I bought with a 30 year fixed through a traditional lender. I bought it with my name and then transferred it to an LLC after closing. I did not realize it at the time, but the bank could call the note due if they find out you do this because of the due on sale clause. I do the same with my current properties, by in my name and then transfer to an LLC, my portfolio lender has no problem with this. I do all the LLC paperwork and filing myself, costs less than $50 in Colorado. A lawyer would charge $800, but it is really easy to do once you figure out what is required. I don’t think there are any tax advantages as far as LLC vs owning personally, but I would always check with an accountant.