Forum Replies Created
Wow, those fees sound ridiculous. We charge $300 to setup and LLC, bank account and EIN, and it’s $100 per year after that to act as your registered agent. We work in Michigan, so I can’t speak directly for Atlanta, but I’m shocked at those prices to simply setup an LLC.
Now, I will say this, if they are setting up an operating agreement (which we do not), then I can see charging a bit more, but I still wouldn’t expect to pay more than $600-$700.
I would keep looking for another provider…you should be able to find better options…
Jay, I very much appreciate you comments. Like I said, this is something I have been contemplating for awhile now, and I'm glad to see someone implementing such an approach. The more I think about it, it just makes sense, and honestly it seems quite simple the way you have it setup.
Again, thank you very much!
Cheers!
This has been a very spirited discussion, and I understand both sides of the argument. My company is very similar to Nathan’s and I understand the systems he has in place to ensure lower turnover, lower maintenance costs, etc. I can go into a very long discussion on the systems we have in place for this, but I’d much rather talk about a more important aspect of this discussion.
With regard to owning properties in the markets you’re working, I think this is a very important discussion. Jay you bring up some very important points about wholesalers having no skin in the game and profiting from the sale on the front end. This is absolutely true, and I agree this can turn into a bad situation a couple years down the road if the properties are not setup right to begin with.
To combat this, I’d like to get your thoughts on something I’ve been thinking about installing in my business for some time now. Unlike Nathan, I own properties in the markets I am working, and I want to increase my holdings. I think the Michigan market is very depressed, and purchasing as much property as I can right now is very appealing.
So here’s what I have been thinking about. Rather than wholesale turnkey properties perhaps it is a better business plan to partner with clients on these turnkey properties. This arrangement accomplishes a couple things. First and foremost it keeps my skin in the game as a wholesaler. I don’t make my profit on the front end…I make it right along with the investor in the form of cash flow. Second, rather than counting on a property manager (again who has very little skin in the game) you would have an additional set of eyes and ears locally to manage the property and direct the property manager on a day to day basis. Jay you recommended earlier that a group of Aussies get together to form a partnership, and send a group over to investing in the properties and provide the management. You thought this scenario would provide very good potential for generating around 12% return. I think the situation I’m presenting would create the same sort of arrangement, but nobody would be required to relocate to the States…my team here would provide the oversight AND we would have skin in the game to make sure things get done right.
I first thought about this scenario after reading Warren Buffet’s book The Snowball. He talks about when he first got started selling stocks he hated the fact that he was sitting on the opposite side of the table from his clients. As a stock broker he would profit no matter how the stock performed. So, rather than be a stock broker he decided to partner with his clients so he sat on the same side of the table. If they profited, he profited, and if they didn’t he suffered right along with them. He partnered with them, and the rest is history…
I’m very interested in your comments, so please feel free to critique this scenario.
Cheers!
Property-Scout, this is a great idea. To follow your lead, I can offer the following team members that I work with here in Michigan:
Building Inspector: Quality Home Inspection Inc. – John McAuliffe – [email protected] – +1-248-471-9800
Title Company – Seaver Title Company – Jason Seaver – [email protected] – +1-248-338-1370
Accountant- Nate Busch – [email protected] – +1-614-207-2441
Attorney – Rob Gross – [email protected] – +1-248-263-3535
Insurance Agent – Chris Moshier – Simplified Insurance Agency [email protected]
Turnkey Property, LLC / EIN / Bank account setup – Email or PM me for more infoIn addition to this I might point you to a few of our blog posts to help get new investors rolling with the process of investing in turnkey properties. Check out our series on how to invest in turnkey properties the right way…Step 1 oddly enough is all about selecting the right team – http://michiganturnkeytv.com/2011/10/27/invest-in-turnkey-properties-the-right-way-step-1-select-the-right-team/
Cheers!
Hi David,
I’m currently rehabbing and marketing properties in Detroit and Pontiac Michigan. You can contact me by email below…
Great post Property Scout, but I have to disagree with you on Detroit. What sent Detroit down the tubes 5 years ago is the exact reason Detroit will rebound so heavily in the future.
The auto industry in the US certainly hit a major setback in 2008 and there were massive job losses in Detroit. This coupled with the foreclosure crisis caused property values to decline nearly 50% and two of the 3 US automakers went into bankruptcy. But again, that was in 2008.
Fast forward to today…all three of the US automakers are profitable making Billions of dollars, and they have been for almost a year now. The unemployment rate has come down to 10.1% from its peak of 14.6% in 2009. Home prices have been stable since mid 2009, and they are actually up 11.1% since January of this year.
Couple this with the recent report from Bloomberg indicating that Michigan is the 2nd fastest growing economy in the US behind only North Dakota which is benefiting from an oil boom. (http://www.businessweek.com/news/2011-11-02/michigan-surpassing-48-states-shows-autos-drive-u-s-recovery.html)
When you look at the full picture, there is a very compelling case for investing in Michigan…you may plan to stay away, but I think you’re missing a huge opportunity.
I’m certainly buying all that I can here in Michigan before this opportunity goes by the wayside.
Great discussion. Opening a bank account is very easy if you come to the US. If you’re not planning to come to the US it can still be done in three steps:
1. Open an LLC and obtain a registered agent.
2. Obtain an Employer Identification Number (EIN) for your LLC
3. Open the US bank account in the name of your LLC with your EIN.I would recommend you setup the LLC and the bank account in the state you plan to purchase property in because it just makes things simpler. If you need help getting this done, I would be happy to help those folks looking to invest in Michigan.
Cheers,
I think I can lend some help to this conversation as well. Like Dan I also live in Michigan and I am investing Michigan for the same reason Dan stated…everything is on sale. You need to know the right areas to be investing in because like every city there are certainly bad areas. However, if you know what you’re doing now is a phenomenal time to be buying property in Michigan.
I agree with Dan in that the typical returns are on the order of 15% – 20%, and the main reason for this is because rents have stayed constant while values have fallen approximately 50%. If you look at indices like the Case-Shiller Home Price Index (see link below), you will find that Detroit is by far the lowest priced region of the 20 regions tracked by the index. There are a couple reasons for this. Detroit was hit with the foreclosure crisis just like the rest of the US, but on top of that Detroit’s auto industry collapsed. With these two events happening simultaneously prices were driven down severely. This all happened in the 2006-2009 time frame. Since then, prices have stabilized, and the Detroit auto industry has restructured resulting in profits by all three automakers for more than a year now. We’re actually starting to see reports that Michigan is one of the fastest growing economies in the US behind North Dakota (see link to Bloomberg story below).
So, given this, it is my opinion that Michigan is an excellent market to be investing in. Prices are low, rents are high, and there is a great opportunity for appreciation. I’ve helped a number of Australians with their investments here in Michigan, and I’d be happy to lend assistance to others. To me, the key for Australians to do well is to have the right team on the ground to help you purchase properties in the right areas, set them up correctly and manage them right.
It is definitely an exciting time to be an investor!
Link to Case Shiller Home Price Index: http://www.standardandpoors.com/indices/sp-case-shiller-home-price-indices/en/us/?indexId=spusa-cashpidff–p-us—-
Link to Boomberg Report on Michigan Economy: http://www.businessweek.com/news/2011-11-02/michigan-surpassing-48-states-shows-autos-drive-u-s-recovery.html
