Can anyone walk me through soup to nuts a real estate deal or at least point to a good/reliable source? Trying to figure out from a good source for a solo deal.
Just thinking about:
1. What type of deal do you typically do?
2. Do you set up an LLC?
2. What do you do to get the information you need, such as rent (if you become the landlord), taxes, fees.
Oh boy.
Sounds like it would be ideal to find a local operator/owner that can walk you through a deal face to face. Would need more info otherwise.
Honestly if you are this inexperienced, you shouldn't do any deals yet and should just buy a property for yourself to live in first. This will teach you the whole searching process, open houses, putting in offers, P&S, closing etc...I'll try to answer some of your questions:
1.) I have absolutely no idea what this is asking. I guarantee my "typical" deal is going to be very different from yours because our experience levels and maybe capital are way different, so this won't be useful to you
2.) If you are buying for yourself, which for you first property you should given your experience level, then no LLC. Buy it under your own name. When you gain more experience and own more investment properties, then yes best practice is to purchase with an LLC, but it depends on how much risk you think there is. For me, if i'm doing larger developments where there is the potential for many people to sue me should something go wrong, then i use an LLC. But if I am doing my standard SFH or 2-family development that i've done 100+ times, I just buy it under my company or my own name for convenience. Every LLC you create requires $500 fee each year and you have to file a separate tax return if you generate income
3.) To get info on rents you can use website like Zillow, Redfin, apartments.com, talk to leasing agents. Actually a good way to research both the rental market and sales market is to pretend that you are looking to rent or buy and set up some tours with brokers. Obviously you would be wasting their time, but oh well. This will give you a good idea of what rents/sale prices are for specific areas and property conditions. As for RE taxes, you can calculate this on your own. A properties assessed value is public info. Some states publish this info online, while others may require you to go down to city hall and request it. From there you can ask the assessing department or use their website to get their mill rate and then do the math. For insurance, call up some insurance agencies and pretend that you are purchasing insurance. Utilities are a little tougher since they depend on how many inhabitants, but typically electric and gas are passed on to tenants. For water/sewer i guess you should see what your city charges per gallon of water use and then google what the average water usage a person uses and do the math. Utilities are typically not a huge expense (water/sewer can be a couple hundred bucks a month), but if your deal depends on whether or not you can pay water bills...then you might not want to do that deal.
This isn't true. I have some properties in LLCs and I paid a one-time fee of about $300 to create them and I report their income on my own tax return as a "disregarded entity" (this only works for LLCs you're the sole owner of).
There are however other downsides to using LLCs-- mainly that your financing options are more limited. If you're buying something small like a SFH or duplex the limited financing will be killer, so you should probably buy it in your own name and get similar asset protection via an umbrella policy, depending on your personal financial situation. But TBH this should all be discussed with an attorney and CPA, not with WSO.
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