All Forum Posts by: Robert Starnes

Thanks Greg! the Tax angle makes a very strong case for me doing things this way.

So, I have a "Hoarder House" that I will have roughly $75,000 invested in by the time I am all done with the renovation. I own the house outright with no mortgage. Renovated home value will be @ $320,000.

What if I go get a mortgage on the home for @ $240,000 and then rent the house out going forward? Current market rent in North Atlanta area looks like it would be @ $1,800 / month.

I would take @ $15,000 and set it aside from the mortgage money and set it aside to service the property needs going forward. 

There is little to no monthly profit in the rent after servicing expenses however I would retain control of property. This way I would make a nice profit on the home, keep the house, and be in a position of having an appreciating asset that could be refinanced every 5-10 years or sold later if needed.

Having already done a very profitable fix and flip this year I'm not sure what the tax implications would be, but maybe the mortgage "profit" would be viewed differently from the profit of an outright sale of the house?

What's wrong with this plan? 

Thanks for your input!

Acquaintance announced he was getting a divorce and selling everything at a yard sale. Asked him what he was doing with the property and he said he was going to let the bank repossess because if he sold it he would have to give his Ex 50% and the rest would be taken by creditors in his bankruptcy. 

I wrote a lease purchase with a clause that my option to buy could be assignable. Had to wait over a year until bankruptcy was finally discharged before I could consider exercising my right to buy. Was laid off due to Covid and banks wouldn't talk to me with no verifiable income so I couldn't get a mortgage on the house. It took six months to renovate house and make rentable. I rented house out for $1550 per month with $545 free profit after all expenses each month. House was rented out for 10 months. During that time RE in North Atlanta suburbs had skyrocketed. When renter moved out I realized that I had to do another renovation but that it would be much more profitable to sell due to property appreciation. Owner tried to squirm out of the deal but the contract held and I was able to exercise the assignable option and sell house after a lot of stress. 

had less than $5000 invested after factoring in profit from renting house out for 10 of the 18 months I had it. House sold for $285k and at closing I was wired the difference between my agreed purchase price of $132,000 and the sale price of $290,000 (minus real estate commissions, fees, etc) for a profit of $132,744.00 plus the very helpful rental income cash flow for 10 months. Now working on a similar deal and not looking back!

Samuel Gates:

Have you considered taking on a partner to help you develop such a multi family project as you describe? That may be a good way to get it done. That way you or your family would retain the land (Think land lease) and have an equity stake you could negotiate in the building with a developer. Possibly something like ownership of several of the completed apartments in the finished building that you could own and live in or just rent out? 

I do agree with other posters that CA is a hard area to develop in, but I think it could be done well and profitably if you took your time, got excellent legal advice and your family could either be bought out or would sign iron clad agreements to go along with the venture.

This could be an excellent way to develop a long term, multi generational wealth asset instead of a one time < $100k payout. 

Good luck to you! Let us know what happens!

Hello All,

Has anyone invested with a Hard Money Lender? Is it possible to do so? Or is this sort of investing only limited to accredited Investors?

Is it possible to invest and also pick what projects you would like to help fund?

I understand there are internet based companies like fundrise but I am more interested in brick and mortar local businesses.

FWIW I'm in the North Atlanta area.

I would look for financing at a small bank or credit union close to the property. You will have an easier time getting a loan from people that know the area. If you have a hard time with the local bank, chances are the property is not a good investment and they know it. 

   I would narrow your search down to 5 properties you are seriously interested in. I would write a letter to the owner asking if I could buy them a coffee or lunch and get their opinions on investing and owning multi family properties in that area. Play it that you want to learn / looking for a mentor. Over lunch or coffee you can make the personal connection and let them know you are interested. Ask them if they know of any good deals, they may have friends and family that will make you an off market deal. Afterwards stay in touch, call / visit every 3-6 months. Get their input on what you are working on.

The best deals never get listed. You don't want to be outside, you want to be an insider for deals.

You won't get anywhere with mass mailings IMHO. 

I would let him know that the property is having deep renovation / systems replaced or whatever... sorry we will not be able to renew your lease.... Get a PM going forward. If this guy bothers you that much tell him bye bye... 

Here in Georgia the towers usually are on a leased at least 50x50 plot of land with access. You are right that usually the cell company reaches out to the property owner. I do know of a property owner that managed to get a tower on his land, by being proactive, tower company was stalled on the site they wanted but my friends property was less than 500 feet from where they wanted to build. He was willing to accept their first offer and sign immediately so they went with him, the other location lost out by haggling and being slow to respond.  

He has made hundreds of thousands in profit from his tower lease over the years.

Thanks Mark. That is a helpful response. Being a PR looks like the way to go. I have a deal in place with the family. They don't live anywhere near the property and have zero interest in it. I had to pay the property taxes to keep it from being taken by the county and sold for past due taxes.

I will go tomorrow and see if I can file as a PR with the Probate court.