All Forum Posts by: Aaron Porter

@Jason Hsieh being that you are a california resident you live under some special rules, and you don't get to have the normal LLC structuring. You should definitely consult with a Real Estate attorney such as @Jason Marino with Royal Legal Solutions who sets up entity structures.  

@Shawn Tinerino  It is entirely dependent on when you want to spend the money to build your asset protection/ estate planning structure.  Working with knowledgeable real estate attorneys who set up these types of entities is a smart move.  Someone like @Jason Marino would be a great person to get in contact with.  

@Adam Wright  you should get with an attorney that knows this space.  Some one like @Jason Marino.  these are the types of entities that he and the company he works for structure and service.  

 I would grab google and look up all of the credit unions that are local to the property and call every one of them.  I would also call the credit unions that are local to you personally that you maybe have a relationship with.  most of the new loans that I have heard about in the last 2-3 weeks are all above 7% for personal owner occupied homes.  

maybe an option for you is instead of doing a heloc or refinancing the entire property is to take a 2nd mortgage. that way you keep your original mortgage at the lower interest rate and only the new money that you are trying to get comes in at a higher cost. 

I have heard that HELOC's are getting harder to get with interest rates going up, and the uncertainty of property values holding. but I am not a lender and I don't have any 1st hand knowledge of this.

@Bryant McClellan personally I wouldn't do a cash out refinance on anything right now if my current interest rate is lower than what I will be getting in the new loan. I would definitely look more into HELOC situations. Call around to your local banks and credit unions to see what they would be willing to do for you on a HELOC. Looking from a lenders perspective I would much rather my client refi a property as the ROI on a refi is much higher than that of a HELOC for me the lender.

Borrowing money through your LLC with you as a PG is probably the way I would go if I couldn't get a HELOC. But there are so many variable at play here, how long are you going to need the financing for? is what you are trying to do a short term investment like a fix and flip or long term buy and hold?

Business loans are always more expensive and time consuming to get in my limited experience.  They also usually have a shorter payback period.   

@Samantha Griffin  just like Steve Clifford said, in the eyes of most banks manufactured homes are looked at as "chattels, or depreciating assets"  and up to this point that has been the case.  I have owned several modular/manufactured homes in the past where I have treated them as fix and flips raising the value of the homes from the purchase price through renovations to the homes. 

Working with local banks and credit unions you may be able to do cash out refinancing.  But I would go talk to the banks to see their lending policies with manufactured homes prior to purchasing the property.  The fact that the home comes with the land goes in your favor and if the home is "affixed to the property, meaning it cant easily be moved (the axles and trailer tongue removed are sometimes requirements)"  also helps your cause when looking at conventional bank financing.

@Chris Breezy  You have gotten a lot of responses here.  BP is real estate, there are definitely Financial advisors on here as well some really smart RE investors.  

there are so many different avenues that your father could go with this money.  Step one is determining which direction your father wants to go.  Does he want something  passive or active, does he want to get dividends on the money? does he need the income that the money could generate? what are his risk tolerances?  what other investments does he have?  

I like using Life Insurance to create extra arbitrage points for whatever investments I am making.  

Each investment is another tool in your investing toolbox.  It is up to you/your father personally as to which tools you are going to use to reach the completion of the job that you want to do.  

@Makiah Byron  I agree with @Brandon Rush  talk with the current owner.  See if they would be willing to look at staying on as a partner, willing to seller finance either for a short 3-5 year term or maybe longer, or maybe they would be willing to seller finance part of the sale price, which could be looked at by the bank as the down payment on the property.  

There are lots of other options such as finding another investor that would be willing to partner with you and pay the down payment for the property, or if you have access to the capital you can do what is called a Modified Endowment Contract which is an Insurance policy that is funded by a single premium payment.  On day 1 of the policy you are able to take a loan against the policy which you can use to pay the down payment creating extra arbitrage with the  money you are using for a down payment. 

If you are capable and able to save extra money every month and not needing immediate access to the investments/ savings strategies. I would suggest looking into Cash Value whole life insurance policies or Indexed Universal Life policies and annuities.  These have NO annual cap for what you can place inside of them unlike 401K's and IRA accounts making them an extremely good long term investment strategy.

Life insurance policies are front loaded for cost meaning that in the 1st 5-10 the policies pay out over 80% of the lifetime fees associated with the policies so in the 1st 5-10 years they don't look that great when looking from an investment standpoint.  That being said when you look at year 20 they are on par with what an the statistical average mutual fund returns.  

@Tanner Bryant- Everyone that has commented here is right.  your question is super broad and did a decent job of getting the conversation started but now you need to narrow down and come up with your goals. 

fix and flips are great

buy and hold is great

Brrrr works great

house hacking is great

syndications, multi family, rv parks, modular home parks, and raw land development are all awesome moves....

What is your personal tolerance for risk?  How much money do you have to invest?  Are you trying to invest with $0 down, or do you have some liquidity?  what would happen to you if your investments start to lose money?  are you protected?  One of the great plays with real estate is that not only should rental property cash flow but in most cases real estate values inflate over time.  

Being able to add extra arbitrage points anywhere you can while also reducing your risks is a smart play.  I really like using Whole life, and IUL policies to create some extra arbitrage points while allowing you access to your money, and offering you other statutory protections from things like taxes, divorce, bankruptcy, and providing living expenses, and a death benefit for your heirs.  Just make sure to work with a reputable and extremely knowledgeable agent who will set up the contracts properly so that they will perform the way that you need them to.