Most clients use either residential, commercial, or private loans to refinance properties after purchasing prom us.

With all 3 types we recommend waiting 6 months to "season" the purchase before refinancing. This reduces the risk of an appraiser giving you a conservative/low valuation, unless you really want your loan ASAP.

Residential refis work well for 1-4 unit properties that are not yet held in an LLC. Some clients are able to transfer the property to an LLC after the refi, but it's important to check with your lender.

Commercial refis work well for 5+ unit properties, although some do take on smaller properties. We have some strong connections in this space to share with you. 

Private lenders are the best option for clients that do not traditionally qualify for a loan. These loans are usually more expensive for the borrower. We advise caution getting a loan on a rental property if your income, cash reserves, or total debt are a matter of concern. 

There are pros and cons to buying both assets, and we have had success with houses, duplex/triplex, and 4-20 unit properties in our portfolio.

Houses are nice because they tend to draw families. We generally see single family home tenants stick around for longer, and rent collection can be more consistent. 

Houses are tougher to scale. The one-unit-per-purchase nature of houses makes acquisition a bit slower, and they're often too inexpensive for commercial lenders to bother with. They may also offer lower cash flow, as owner occupants are willing to pay more than investors in many cases.

Small multi-family offers more units per purchase, and generally slightly higher pro-forma returns since they are purchased primarily by investors rather than owner occupants. 

The more units per building, the more you have to manage turnover. Management, location, maintenance, etc.. should be closely monitored by the investor. There are also fewer large properties than they are small, so sometimes you compete with more investors for them.

The duplex or triplex behave like a hybrid of the house & the multi, sharing a bit of pros and the cons of both. 

We will never promise you appreciation based on our own speculation, but we have seen several of the affordable midwestern and southern markets we operate in outperform the market over short and even multi-year intervals. 

We target markets and properties that we would expect to be generally nonvolatile in value due to the commodity-grade nature of working class rentals. 

We also seek out relative undervaluation in these markets- do they seem "cheap" compared to other, similar products in other affordable cities.

Recent rent growth with reasonable cause to continue in the near future is a huge plus that we jump on when we recognize it. 

We have historically seen this type of property to be relatively recession resilient & believe they will continue to behave this way; however, it's important to recognize that like any other investment there is no way to guarantee that a specific type of property's value is immune to market volatility.

More than you think you do. Properties take money to operate properly and we take on the mentality with our own portfolio that of "spend the cash flow on improving the property" until it is exceptionally stable.

Once your property maintains a high level of stability, allow the cash flow to build your reserves to a point that you feel there is sufficient surplus for you to draw the profits for other uses.

We always suggest the use of surplus goes towards additional investments. If you're interested in dabbling in more complicated projects, this may be a good time to gradually add these to your portfolio and let your stable properties pay to bring them up to snuff.

Invest conservatively, and be disciplined in building and strengthening your safety net over time so that your real estate business, affiliates, tenants, and YOU do not have to suffer in the event of unforeseen circumstances.

Look, we're not your lawyer. We're not anyone's lawyer. You should consult with one to make a final decision on your own, but here's what we have seen other investors do:

If they're adamant about using conventional rental property loans, investors will often hold in a personal name or a land trust. Otherwise, an LLC is also a popular option.

We see many investors hold several properties per LLC. As they grow, they modify their corporate structure to include multiple LLC's. 

Other ways to reduce liability include but are not limited to appropriate insurance policies for property liability, umbrella liability, and business liability policies. We also see some business interests owned by trusts rather than the officer themselves. The extent to which these additional measures are used depend on the size, risk, and legal counsel the business has received.

Some investors form their own LLC's online, directly with state government websites. This can be cheap and fast, but you may make an error in formation without proper counsel.

We're not your accountants either. In fact, we're not accountants at all, so consult with yours..but we do know that under particular conditions rental properties can reduce your tax bills in the following ways.

Depreciation. This can sometimes be accelerated as well, leading to substantial deductions if the investor is qualified to deduct these losses.

Unrealized gain. Under the right conditions, equity that is not liquidated may not be taxable. Appreciation, organic or forced (i.e. improving a property) are common means of unrealized gain.

Debt. A check you deposit from a cash-out refinance is, under many circumstances, not a taxable event. 

We're gonna say it one more time.. execute your tax strategies under the guidance of a CPA.

Hell nah. Well, not as passive as owning index funds. You've got to monitor your business operations, even with a good manager in place. 

Once you build a good relationship with management & fully stabilize your property, your portfolio will likely be pretty uneventful. Still, monitor every monthly statement for unusual income or expenses.

Even though it takes a bit more effort and expertise, the income & overall returns of well acquired, well managed real estate portfolio can be very rewarding.