Friday, June 12, 2009

As a real estate investor, I am repeatedly asked this question: “Should I buy property in my name, or in the name of an LLC or Incorporated company?”

I have an LLC under which I own properties, but feel I should let an expert address that question. I posed the question to Annette Coker, a licensed broker/realtor, and good friend.

Annette’s response:
“I have houses in an LLC and here are the downsides: Financing is impossible to get, so you buy the home in the individual’s name and quitclaim at closing to your LLC. There are other disadvantages, too. If you want to get a line of credit you will pay a higher interest rate. Also, homeowners’ insurance will be higher. As soon as you put real estate into an LLC, it becomes commercial and I personally think it’s a pain.

However, if you ever get sued, apparently the person suing cannot get your personal assets. I question that, too, as with the Internet and other technologies a person can find you even if you hide behind the umbrella of an LLC. It would all boil down to liabilities and the "corporate veil". An attorney could provide more insight into this…

No, I do not think the LLC is the best way to flip. It is questionable in my mind whether it is the best way to even hold long term; a Land Trust is another vehicle that may be more attractive than an LLC. The primary difference between the INC and the LLC for real estate is that there is less accounting involved with the LLC, and tax reporting is easier (far less complex). Most people do LLC’s for real estate.”

Thanks to Annette for taking the time to answer this question. She can be contacted through her company, Chapman Hall Realtors Premier at

JM Kelly, The Master Flipper

Monday, October 15, 2007

It's a Buyer's Market for Home Investors

If you have been reluctant to buy an investment property but are really interested in doing so, now is the time. Folks who are risk averse tend to shy away from real estate, yet will fund their mutual funds, stocks, 401k plans, etc. with all their spare investment dollars because of a sense of security.

For this very reason, many people were not able to retire after the technology bubble burst around Y2K which hit tech heavy funds hard. A result of the correction that ensued caused many to shift their investment dollars to other areas, such as real estate, which itself is now correcting due to builder surplus and over zealous lending practices.

Everyone knows about the US real estate bubble, or market correction in the US housing sector. It is common knowledge that home foreclosures are through the roof (see
"Mortgages in foreclosure at record high") but the insightful see this as opportunity. If the market is flooded with a particular good, does it not become a buyer's market for that good? Economics 101.

While I believe that it is still possible to buy, renovate, and flip a property for a quick profit (even in this market), I personally feel that building a solid portfolio is wiser for many. After all, the properties I am acquiring now can be flipped for higher profit later when the pendulum swings the other way. The "trick" is buying at the right price so that a profit is made no matter when you sell.

A notable point:
the very first American millionaire, a German immigrant named John Jacob Astor, was a real estate investor (and landlord).

What's holding you back?

Saturday, October 6, 2007

How to win at Monopoly: Buy Houses, Charge Rent

Remember how to play Monopoly?

The object of the game is to purchase multiple properties, so when an opponent lands on your property, they have to pay you rent. This all time classic game is truly a mirror image of life. Controlling properties (homes, apartments, offices, etc.) gives YOU the upper hand in the game of life. After all, it will be you getting the rent check each month.

If you've done your homework, and bought your property below its market price, you will be cash flow positive. As an investor, you NEVER want to be cash flow negative. If you are cash flow positive on multiple properties, you will have a great second stream of income. This extra money can be put in savings, in the stock market, or into another property.

If you are "jonesing" for a new Lexus, first I would suggest a used Toyota, but if you must have that car because you've earned it, then pay for it with the extra income that you've managed to build. Avoid paying for it from your primary salary, and never ever lease!!! After all, who wants to rent? :)


Tuesday, October 2, 2007

Flipping Houses for Profit

My true love is real estate. While I have enjoyed working in IT for many years, nothing gives me thrills quite like real estate. Finding the right investment property is like winning at poker or blackjack, and the adrenaline rush is just the same.

I have bought and sold both residential and commercial properties, and I am constantly looking for the next "diamond in the rough". Most people when looking at houses are evaluating them based on if they would live there. BIG MISTAKE! You want to find a house in a good location with good curb appeal and structural layout, but one that has been horribly neglected. Find this house, and you will make thousands (in any real estate market). However, you must buy it at the right price to do so...

In my next few posts, I will focus on how to find undervalued homes and turn them into personal wealth.

Monday, October 1, 2007

A "Ground Breaking" Entry

This is the initial entry for a blog that will hopefully change someone's life for the better. This blog is for anyone who yearns for something more than a regular, predictable paycheck, who either wants to augment his or her income or to replace it altogether by flipping real estate. This blog is for those who wish to retire wealthy; for those with an "investor mentality", not a "renter mentality". If you have a "renter mentality", I encourage you to take note of this advice and change your thinking, as you are making the rest of us rich and not yourself.

Topics of upcoming discussion, in Synaptic Order:

  • Flipping Houses
  • Entrepreneurship
  • Wealth Building $$$
  • Real Estate Investing
  • Foreclosures
  • Tropical Real Estate
  • Kissing Your J.O.B. Goodbye
  • Why I Made J.O.B. an Acronym
  • Dollar Cost Averaging Over Time
  • Donald Trump's Hair
  • Tax Sheltering
  • Multiple Streams of Income
  • Leaving Your Heirs a Legacy
  • The Pareto Principle
  • Financial Independence
  • Early Retirement
In this journey of discovery, I hope you gain the knowledge and determination to make that first flip, or to grow what you have started. As with all great journeys, the first steps are the hardest but the most critical. If you never change your routines, then routines are all you will surely ever have. I started down this path 11 years ago, and have learned enough to share.

While tongue-in-cheek, I am dead serious about the need for you to be independently wealthy through your own efforts. Don't just rely on your job to meet your financial goals!

I challenge you: there are savvy investors who are positioning themselves for great wealth in this buyer's market. Are you one of them?

Best of Luck...