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Hi,

As we are a new startup LLC, in the current economic climate we are having a few difficulties getting a morgage for residential rental properties through our LLC. So we are planning on taking out personal mortgages and then transferring the asset to the LLC, whilst still holding the morgages in our own names. Is the assett still as covered legally as if the mortgage was held by the LLC? Are there any other legal implications doing it this way? Any ideas on how we might handle this taxation wise.

Thanks in advance.

Hi everyone,

Im a UK resident setting up an LLC in Indy with some partners. We are looking for a reasonably priced lawyer with experience in residential rental. Have you had good service, recomendations anyone?

Thanks in advance.

Hi folks,

I keep looking for the good news and I may have just found some. Looks like the Indy government are dishing out a fair bit of cash to buy up foreclosed properties and generally tart up the area. Could our property prices rise as a result? You never know. Finally, my geography is a bit hazy but as we (as a group) are largley invested in the Broad Ripple area, do we not come within area 2 of the regeneration plan?

http://www.indystar.com/article/20081113/LOCAL18/811130434/1001/NEWS

In any event it can't be a bad thing.

Robin

PS Just heard today that the Fed have ditched the idea to buy up $700M of toxic debt. One moment it was going to solve the worlds problems and now it is Nahhhhh? Aint gonna work! What did I miss?

PJ,

First, let me welcome you to Indy and to Investor's Choice.  I believe you will find our group friendly and helpful.  We have several investors from California that join us regularly, so maybe you can get in touch with your fellow "bretheren" to talk about Cali to Indy deals. 

As you pointed out, I have a team of people that are willing to help with all of your investing needs.  We have created our company to cater to investors.  I'm sure you have already browsed the site, but I want to let you know that our team includes real estate brokers, appraisers, construction members, property managers, and fellow investors.  We are able to offer discounted services through this combination that many of our members find useful and economic.  I think you will find we are very knowledgable and helpful.  You can reach either myself or my office manager, Wendy Swain, with any questions you have.  I can be reached at brian@investorschoiceindy.com or 317-882-8023, ext. 201.  Wendy can be reached at wendy@investorschoiceindy.com or 317-882-8023, ext. 204.

We look forward to hearing from you soon and seeing back on these boards with your questions and input. 

Thanks,
-B

  Ooops, I've already broken the rules of not asking for any referrals.  Bad PJ!  My apologies to everyone!

PJ

Hi Everyone,

My name is PJ and I am a Real Estate Investor from California. 

I am extending my investing business to Indianapolis to take advantage of the "Hot" city.    There are lots of deals in CA but they are still too high to cashflow in most cases.

I would like to start creating a team in the area and would really appreciate IC members' recommendation on professionals there.  I am specifically looking for RE Agent (Brian?) who I can work with as an investor's agent.  I will be rehabbing the properties I acquire so I would need project managers, contractors, property managers, hard money lenders, etc, etc. 

I am very excited to be in your market!

Sincerely,

PJ

OK guys so now the £=$1.70 and looks like it could go lower. The dollar is getting stonger again. So what does that mean to the foreign investor? You get more of your own currency (in my case £) for your dollar investment. If you have already invested, good. If not, thats not quite as good as it was, but don't forget that since January prices are also much lower so the deals still stack.

Why don't you keep up to date with the way your currency is moving with regards to the dollar and work out YOUR strategy as opposed to what everyone else is doing. I subscribe to a free daily newsletter (example below). And for the benefit of the US based investors who think this may not involve them - where do you think your buyers are going to come from? Check out the foreign investment in the GO zone. Don't know what the GO zone is? Time to find out- they are your competition. Keep your minds open to all options and find out what is happening in other parts of the world at the same time. We cannot exist in isolation now. It is a world economy that is biting us on the ass and the better we understand it, the richer we become.



Bernanke comments give the markets hope …

Yesterday's fairly restrained market was kick-started into life in the afternoon by comments from the Federal Reserve Chief, seemingly directed at Congress, in which he intimated that the US economy required a new fiscal stimulus to get it back on track. Both the Dollar and the Stock Market rallied with the Euro hitting a new 18-month low this morning. Cable also briefly fell below 1.7100 but early morning jitters have halted the Dollar's early progress. Technically, there is strong potential for a further immediate strengthening of the US currency, especially if doubts persist as to the likelihood of a turn around in the UK and Eurozone economies.

LIBOR interest rates continued to correct – rapidly in the Dollar's case, but in a more sedate manner in Euro and Sterling. The freeing up of the Money Markets is vital to an economic pick up so expect further Central Bank measures to keep the momentum going. Expectations for huge liquidity adds plus continued official rate cuts should keep the momentum going but it is a return to confidence between Money Market operators that will determine whether period lending resumes.

Talking of economic stimulus, the UK, as expected, reported Government borrowing at a record level last month with September's figure surging to £8.1 billion, almost double the number from 12-months ago. Estimates for the total for the year are for an excess of a massive £60 billion, with rises in the deficit for the following 2-years. With the assertion from Brown yesterday that the UK was looking to stave off a continued slide into recession by spending, plus the additional funding required to fund the Financial Market's bail-out plan, these borrowing figures look destined to deteriorate before any improvement for increased tax revenues are seen. That's not to say that this is not the right way forward for the UK economy in the short term. Bringing forward Government construction projects to stimulate and underpin the UK building and civil engineering sectors could certainly prove to be inspirational. The problem is that despite having a fistful of factors that they are able to influence, the UK Government is unable to do anything about the one thing that is fundamental to the economy's recovery. That is increasing consumer demand from its current lows. Confidence is at such a low that even if No. 10 were able to slash interest rates, it is going to be some time before the consumer returns to the High Street in any numbers. It looks as though it is going to be a long winter……

Elsewhere, Iceland becomes the first sovereign state since the UK in 1976 to go cap in hand to the lender of last resorts, the IMF. For those of you old enough to remember the results in the UK following the IMF loan, the restrictions likely to be imposed upon Iceland will be draconian making redemption of the frozen deposits (no pun intended) a distant prospect.

Also, more Central Bank assistance for the Banking Sector with the French injecting funds into their larger institutions with the Saudis also adding liquidity by placing deposits with domestic Banks.

Today we are largely data free although the UK CBI quarterly industrial trends survey plus the Nationwide regional consumer confidence survey should make interesting reading – unlikely to be positive for Sterling however. The major ‘news event' today will be any info on the Lehman CDS settlement figures and especially with regards to the institutions involved. As expressed yesterday, the numbers are still unknown so both stock and money markets will be influenced on any headlines.

Yeah I have a thought or two!   

I have experienced some pretty bad months with my 8 units in Indy.  One bad tenant, 6 months vacancy to follow, stolen appliances, broken furnace, tree fell into electrical panel of duplex.  This has been in the last 6 months.  I don't think any of these things are likely to happen again in the next 6 months but I bet something else will. 

My solution is 2-part.  1.  buy props in better areas than my first ones, attract better tenants who don't steal stoves.  2.  Owning more properties also increases cash flow if bought right.  I see it like the more properties you have the less the hit when one goes vacant. A smaller percentage.  This has been true even with my long vacancy, only 1/8 of the portfolio was vacant while 7 payed their rent. 

Just the same Reserves are important, and I don't have cash laying around either.  I do have an equity line which I can use for liquidity to get me through the bad months.  The good months should pay it back so long as I bought right... and so long as the good months come back. Some how or another we have to keep reserves to control the property long term, through good and bad.  But we need to get the money before we need it because no one gives it to you if you need it!

B

This is not a cure all nor is it the silver bullet; however, I think diversity in your portfolio and maintaining numerous properties helps quite a bit.  Diversity in that you maintain high and low end properties, and commercial and residential properties.  As the market fluctuates, all of those segments can flourish or dwindle.  Also, being able to spread your losses over several properties makes it easier to take the hits you are talking about.  I look at rentals as long term investments.  I might take a loss here and there, but in the long run, a furnace can only go out so many times in a property before you replace it and are set for another 15 to 20 years.  The upfront cost is painful, but I win in the long run.  In addition, property values can and do increase over time.  So even if I break even (rental income minus expenses, vacancies, collections, damages, repairs, etc.) throughout the years of owning properties, I will still come out ahead because I bought my property for below market and have increased equity due to appreciation.  In addition, I have some tax deductions along the way.  I know many investors that have properties running at a loss for those tax deductions.  I am one of them. 

Anyone else have a thought or two?

-B

There is a lot to comment on.  Since I am new to this I only have one comment for now.  We all have heard bad tenant stories.  I do not currently have any rental properties but do not like the idea of trying to find my own tenants.  I know Brian recently merged with a property management company.  I plan on using them when the time comes.  I hope a good background check will remove some of the risk.

Since I am so new to this I have the same worries you do.  My plan is to start small with minimal risk.