Question About Strategies and Taxes

[PREO LLC]

Have you considered investing out of state?  I'm invested in multiple states and it has worked well for me.  Some markets are good for appreciation, others are good for cash flow.  Having diversity in different markets is a good thing.  If one market sours, another might be booming.  The trick is having property managment you can trust.  Feel free to PM me if you should want any recommendations.  

[D Kame]

Hi Erma,

Thanks much for taking the time to write your detailed reply.  I have a couple of questions for you:

1) I'm not sure how one goes about not personally signing for a loan.  With a "starting out" LLC, will any lender write a mortgage without me personally guaranteeing the loan?  Is this a big issue?  It would never be my intention to default on a loan.

2) I'm pretty convinced by you and others to go with positive cash flow.  I wasn't quite clear whether you are saying to buy properties at 70% of market value or 70% financed.  If you mean 70% financed, my question is that if I am looking at 70% loans and properties making $200/mo, how do I ever build up the 30% down for my next purchase without pulling out equity?  Maybe I'm not thinking about this right... or not patient enough...
If you are saying 70% of market value - ugh - now I'm depressed!  (and definitely not skilled or patient enough...)

To Dave T - Thanks for the info on the debt coverage ratio.  This seems like a great guideline. (Though maybe a little challenging.)

To PREO - Thanks for the suggestion about out of state properties but since I'm just starting out, I feel like I want to stay local to keep things managed.

Thanks all for your suggestions - DK