Overseas Investor humbly request for expert advice on REO

[bigbird]

OK, Bigbird!

Best wishes for success.  I like the 100 year plan and generational thinking.  I started doing owner financing with 40 year mortgages.....guess I need to expand my thinking.  Good call!

Let me know if you need any information in Southeast U.S.

Take care for now.

Rob
R.E. Investor/Mentor

Hi Rob,

Thanks for the compliment.
I have always viewed the cash that I have on hand as a depreciating an asset with the increasing rate of inflation in the world due to an exponentially increasing population. The real "cash" that keeps up with inflation will be assets like Real estate , gold etc.

I think its also based on this concept that most real estate pros are not afraid to leverage as the money they borrow presently will be worth less in future even with the interest factored in.

However,I feel that it makes sense only in the long run, meaning that you "survive" the 15 -25 year mortgage safely.  I personally feel that this method may be risky in the short short run should there be an economic crisis or property crash.

Despite saying this, I still feel that its a great deal to leverage in the states compared to most countries whereby there is a risk of a margin call. In the states, you guys can still choose to whether or not to walk out of a house when you are upside-down. From my experience, in most other places, the banks or lenders will call you up and call for  a top up forcing a foreclosure auction.

Please take note that the above are my random ramblings which I hope did not offend anyone.

Regards,
Bigbird

[bigbird]

BigBird,
If it were me, beginning to invest in the United States, I would look to New Mexico and Texas as having well-priced housing stock that didn't hyperinflate in the bubble market.  Homes are affordable there, and people are moving there.

Furnishedowner

Hi furnishedowner,

I thank you for the goodwill advice. I really appreciate that.

However, the way I invest will be in areas that people are avoiding for some reasons like Detroit with the crash of the car auto mobile industry. In this way, there is less competition and I am looking at a very long term basis(above 20 years) when I buy. 
Of course, I may be very wrong and may end up with many SFHs in ghost towns. Thats a risk I am prepared to take but please do not follow me if you are just starting out in REI.

cheers,
bigbird
"If everyone is thinking alike, then somebody isn't thinking." - General George S. Patton

[kiwi1988]

I would personally recommend using one LLC per property otherwise if you are faced with a lawsuit and say 5 properties are owned by one LLC, the person suing can take all 5 properties. At the most (which i have read in books) have a max of two properties per LLC.

cheers,
Kiwi

[davewindsor]

I would personally recommend using one LLC per property otherwise if you are faced with a lawsuit and say 5 properties are owned by one LLC, the person suing can take all 5 properties. At the most (which i have read in books) have a max of two properties per LLC.

cheers,
Kiwi

Don't waste your money on setting up multiple LLCs.  If you are sued, the insurance company pays for your lawyer and then covers the loss minus deductible if you lose.  That's why you get insurance.  So, don't worry about LLC protection from lawsuits.  Just make sure you have a lot of liability coverage.

Putting multiple properties on the same policy is cheaper too.  You also have to pay an accountant at least $700 per LLC to sign it off every year.  Stop reading books and recanting theory that paralyzes your dreams from overanalysis.  Just jump into real estate and you'll cross those bridges as you get there.  You'll do fine.  I did.

[kiwi1988]

I would personally recommend using one LLC per property otherwise if you are faced with a lawsuit and say 5 properties are owned by one LLC, the person suing can take all 5 properties. At the most (which i have read in books) have a max of two properties per LLC.

cheers,
Kiwi

Don't waste your money on setting up multiple LLCs.  If you are sued, the insurance company pays for your lawyer and then covers the loss minus deductible if you lose.  That's why you get insurance.  So, don't worry about LLC protection from lawsuits.  Just make sure you have a lot of liability coverage.

Putting multiple properties on the same policy is cheaper too.  You also have to pay an accountant at least $700 per LLC to sign it off every year.  Stop reading books and recanting theory that paralyzes your dreams from overanalysis.  Just jump into real estate and you'll cross those bridges as you get there.  You'll do fine.  I did.

I have heard in many situations where insurance doesn't always protect you from lawsuits- depending on the lawsuit and the seriousness. However at te end of the day its up to you

[davewindsor]

I would personally recommend using one LLC per property otherwise if you are faced with a lawsuit and say 5 properties are owned by one LLC, the person suing can take all 5 properties. At the most (which i have read in books) have a max of two properties per LLC.

cheers,
Kiwi

Don't waste your money on setting up multiple LLCs.  If you are sued, the insurance company pays for your lawyer and then covers the loss minus deductible if you lose.  That's why you get insurance.  So, don't worry about LLC protection from lawsuits.  Just make sure you have a lot of liability coverage.

Putting multiple properties on the same policy is cheaper too.  You also have to pay an accountant at least $700 per LLC to sign it off every year.  Stop reading books and recanting theory that paralyzes your dreams from overanalysis.  Just jump into real estate and you'll cross those bridges as you get there.  You'll do fine.  I did.

I have heard in many situations where insurance doesn't always protect you from lawsuits- depending on the lawsuit and the seriousness. However at te end of the day its up to you

Give me specific cases proving you'd be better off with multiple LLCs.  Don't just say you heard it.

[Rob in Atlanta]

Multiple LLCs will require multiple tax returns, under law.  If you plan to use entities rather than your person to insulate your properties, investigate using trusts, as there are no requirements with trusts to file a special tax return.

Please be advised that I am not suggesting not to file a return nor am I giving legal or tax advice.  Just buy AND READ a tax code book to understand the laws and make your best choices.  According to the tax laws, a trust does not require a return like an LLC or corporation.

Rob