Building wealth through real estate buy and hold

[aiki14]

Originally Posted by BlueChips

I've been following this discussion on the sidelines. Pretty much most of my questions have been already answered by both of you.

aiki, you have properties in different states. do you use local banks to finance your properties? or do you use a bank in the state where you live?

I also posted this article on housing meltdown.....

http://www.trading-lab.com/forums/ho...=2284#post2284

We prefer to use local (to the property) banks. They have a familiarity with the value, can arrange local appraisals, and the closings are easier.

[Alchemist]

Originally Posted by aiki14

Bottom line is people will take better care of their primary residence. Obviously equity is equity, but if you're living there the banks feel they have a tad extra leverage.

ok thanks. was trying to figure out what would make the difference....

[ChaosTheory]

I'm interested in this too.

aiki, what's the average return on beach front properties in the locations you mentioned these days? I'm talking about returns as if the properties were paid off.

thanks

[aiki14]

Originally Posted by ChaosTheory

I'm interested in this too.

aiki, what's the average return on beach front properties in the locations you mentioned these days? I'm talking about returns as if the properties were paid off.

thanks

I am not sure how to answer your question, we have 3 Maui properties that are very different, A 1 bedroom condo in Napili, a 2 bedroom condo in Kihei, and a 3 Bedroom house in Spreckelsville. They have similar but not identical occupancy rates, and they rent for very different rates.
As an example the Napili condo was 650k, averages 82% rented for the last 3 years (41 weeks/yr), average rate is $1600/wk, All expenses and fees run $1200/mo, and our mortgage is $2900/mo on 450k. We clear about $1500/mo on this one. The price of comps is around 750K currently

Kihei is a less desirable location but the place is bigger so it works out about the same. Spreckelsville has a different season, it is the windsurfing capital of the world and rents to a single client for the summer and we average a bit more than the other two after expenses.

I hope that is of some value to you.

[Alchemist]

I have been researching the subject extensively, especially the LLCs structure thing. I know I will have to consult with an attorney eventually, but I wanted to hear your take on this:

I understand that if you use multiple LLCs to insulate risk but the LLCs are all single-member, most states won't protect you in case a lawsuit arises as you are basically considered a sole proprietor disguised as an LLC. do you know anything about this?

also, do you purchase umbrella liability insurance for your rental properties?

thanks

[Alchemist]

one more question: do you have any experience with low-doc no-doc loans?