House #4 identified

Using the same strategy we did for house #3, we have identified house #4.  We located 2 houses we were ok buying and went after one.  If it falls through, we move on to the other house.  We currently have a contract on the first house for $79k so no need for house 2 at this time.  We close sometime in June.  We'll set the date after we've done our inspection and the appraisal comes back.

For this property (and all purchases going forward in Memphis) we will be using property management.  We've found a property manager at a really great rate.  My brother has a full-time job now in Memphis and while 1 house is ok, he can't be managing multiple properties.

We're also using a member loan for the down payment.  We're using a $9k member loan to cover the down payment and most (if not all) of the closing costs.  Why?  Because we don't quite yet have the funds to purchase a house without dropping below $5k.  It would be close but why risk it.  Our next house should be able to be purchased with 100% company funds.  Our target for that is July to keep on our timeframe.

So what does this equate to?  The company is purchasing a house and basically not spending a dime.  AND we're still cash flowing about $125/month after all expenses, management, and member loan costs.  You may be thinking that's awesome, and you'd be right!  You may also be saying "Why don't you open it up to others and then you can buy as many of these as you get your hands on?"  I'd say you have a great point, BUT......we're not quite ready to go down that road yet.  When you involve non-members (personnel outside of the LLC), you run into other situations that I'm not clear on yet.  There are potential SEC issues, etc.  So one of my goals for 2014 will be to find out as much information as I can on the ramifications, which will most like require some consulting fees and such that we're not ready to bear yet to make sure whatever we do is 100% legal.  That will be a big talking point in 2014.