All Forum Posts by: Aaron Jones

Ok fine... I won't be a cheapskate and just do a quitclaim. 

What's a fair price for a title company to facilitate the closing of an all-cash purchase of a home? I really was expecting to pay like $400-600, not a couple thousand.

I have a relative (in-law) that is selling me a house for dirt cheap:

($18k for a house that will be worth ~$45k after about $10k or less of work)

We're not involving any realtors because that seems unnecessary and would significantly impact my costs. My question is about how to close. I spoke with a title company and they told me that it would cost me at least $1500-1800 to close with them and get a warranty deed. That seems a bit expensive. I mean, that's 10% of the purchase price. 

So I was thinking... Maybe I can just quitclaim it. I mean, I have examined the title records on the property for the last 70 years via the county's online records system. Everything looks legit. Any reason why I should not just quitclaim it and avoid the extra expense?

So there are a ton of people that are saying that they have had success getting business credit with F&G, and that's great, but I hadn't seen anybody talk about what they've done with the credit. Can anybody share their experience with actually completing a BRRRR or a flip? If you did a BRRRR, what type of banks did you use, and how did they view this strategy? Also, how do you estimate minimum credit card payments before you sell or refinance?

Thanks for your response. I would say my primary reasons for wanting to put the properties I plan to acquire in an LLC are: Personal Asset Protection Establish/Build Business Credit

Hi, I am finalizing my investment strategy, and I have a few questions regarding how/when to utilize LLCs. I plan on purchasing foreclosed SFHs with cash, rehabbing as necessary, renting them out, then getting financing based on the new appraised value to pull out cash and repeat the process. Basically the BRRRR strategy, but with a full cash initial acquisition and Delayed Financing rather standard re-financing. My question is: Should I 1. Make the initial purchase under an LLC, then seek financing with a personally guaranteed loan in the LLC's name? Or 2. Make the initial purchase personally under my name, secure financing under my name, then quitclaim the property to the LLC? If I pursued the 1st strategy, how common is it for local/regional banks to make residential loans to LLCs with personal guaranteees? If I pursued the second strategy, wouldn't I have to get 2 insurance policies, one while I personally own the property, and another when I change title to my LLC. Also, I understand I would be at risk of the "Due on sale" clause, but it is rarely called, correct? Any help/advice would be greatly appreciated. Thanks!

I've seen a few properties for sell at attractive price points in the areas I'm looking to invest, but the properties are in C/C- neighborhoods, and the units are all or mostly 1-beds. I view them as too risky to have low income tenants in 1-bed units, which typically turnover more often. This would seem to create a very management intensive situation, and if turnover really is higher in 1-bed units, I'd be adding greater risk by having to find another quality low income tenant every time the unit turned. I'm not opposed to either low income or mostly 1-bed units, but not both. 

However, this is all just theory. I just wanted to ask the more experienced investors on BP to make certain that I'm not passing up deals that could work. Does anyone else have experience with these types of properties to support, or counter my suspicions?

@David Edwards

First off, sorry about your dad's injury. I hope he is fairing well. How generous of him to give you some of his settlement. My Pops would've went shopping. Or did something really great for his GRANDkids. Consider yourself blessed.

Now, I think everyone has provided some great advice. Basically, buy income-producing real estate, using one or several different strategies. I second that, but before this, I think it would be wise to consider a couple other factors. 1.) What are the tax implications of the settlement money? Will your Dad have to pay taxes on this award? If so, you may want to reserve a few thousand for his tax bill... 2.) What's your personal credit looking like? All of these strategies involve getting mortgages, and you can't really do that if your credit is a mess. Make sure you're looking good, or rather good enough, on that front before you pursue buy and hold properties. It matters less for flipping or wholesaling.

My $0.02. Best of luck!

@Mike B. Thanks for your reply!

I'd love to acquire both, but I don't see that as feasible as 1.) I'd have to put down 25% (not 20%, since this would be a mortgage on an investment property), as a down payment on the "decent" duplex, which would be just about all I have to invest, and 2.) I'm not sure, but I assume I'd be hard-pressed to find a lender willing to make a mortgage for $30k. Maybe that's the better play though, to scramble and find a lender for the cheaper property....

Hi BP,

Need help deciding on my first intentional rental property purchase. I've found a cheap duplex for ~ $40k that this currently occupied and in pretty good condition, but in a C- neighborhood. I've also found a duplex for ~$140k that is in a B-/C+ neighborhood. I can buy the cheap duplex for cash, or put a 25% down payment on the decent duplex. Cash flow for the cheap duplex would be about $500/month, and about $250-300 on the other. Either property would be managed by a property management company.

I'm intrigued by the larger cash flow of the cheap duplex, and the idea of buying a few properties like these, holding them long term, and possibly getting a blanket equity loan to scale. The larger cash flow would enable me acquire more properties quicker. Disadvantages are low appreciation, harder to sell, and possibly troublesome tenant class. The other duplex will offer less cash flow, but more appreciation, and would be easier to sell in future years.

What are your thoughts? Anybody have experience with both types of properties?

Thanks for the quick responses everyone. Glad I asked here first.