9) Upgrades that Matter & To LLC or Not to LLC?

Real Estate Investing with House Money

We’re changing the order of our segments this week! Let us know if you like the change.

House Money Weekly

In this week’s House Money Weekly segment, your hosts discuss blog 110, “To LLC or Not To LLC?” LLCs are not a requirement for real estate investing. You can have up to 10 personal loans in your name. Your spouse can also have 10 loans in their name (if you’re not on all of them together). Alan recommends maxing those out or maxing your debt-to-income (DTI) ratio, whichever comes first will force you to stop. You can’t have personal loans in LLCs. Lauren currently has a mix pf personal loans and umbrella insurance. Tom went to LLCs for rental number 5. Alan adds that paid off properties open you up to more liability than those with loans. Now, if you’re creating a partnership, then you should have an LCC and contract up front.

Mortgage Minute: Jasmine answers the question: Which documents should buyers have ready?

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Real Estate Is Easy Interview

Lauren interviewed Kelly Riedinger, aka Kelly the Appraiser, who has been appraising in Atlanta for 27 years. She’s a residential appraiser because she likes the short-term nature of those projects vs commercial projects. In her area, you can only do one or the other. Kelly points out that appraisers don’t really decide the value of the property. They see what the market is telling them the property is worth. If an appraisal comes up short, you could renegotiate the contract, or the agent may start taking other offers. Lauren asks how long appraisals take. Most of her work happens after she visits the property. Luckily, she gets paid more for more complex properties. So, what actually adds value to your property? Kelly recommends asking appraiser friends before you make updates to properties, unlike the gentleman who put $30,000 worth of fruit trees in the front of a rental. Kitchens and bathrooms are number 1 in value. Adding square footage is great too, along with trim work and details. Appraisals are about quality and condition. Look out for maintenance items vs capital improvements. Make sure you let the appraiser know what updates have been done and when. When it comes to small multi-family properties, Kelly looks at sales comps and rents. Of course, they touched on the differences in appraising STRs vs LTRs.

Contact Kelly: https://www.kellytheappraiser.com/

Teatime with Tom

Tom’s segment is about investors who over-improve their properties. For example, when you choose to put in white appliances in an area that calls for those rather than putting in stainless steel. As a real estate agent, over-improved is much better than properties that are designed to a very specific taste. Just know that your taste may not be someone else’s. Short-term rentals may require more improvement, but the thought process is the same. Then, your hosts detour to talking about windows in bathrooms.

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