All Forum Posts by: Amit Chawla

@Remington Lyman any info you have will be helpful.  I would be happy to reach out and see if any are willing to start a relationship.

Amit

@Clinton McGilvray any chance you can share their contact information with me? I am planning to do a lot of BRRRR in Ohio and would love to connect with a local bank and build a relationship.

@Tim Robbie just a thought, but one way to go about it is to talk to all family members involved.  If everyone has the same thought as you as to trying to access the equity in the land, then you have some options.  

You could create a company and put the land ownership in an LLC making each family member with interest a member of the LLC. Anything you take out would have to be split according to ownership interest or in some other way that everyone deems fair. For instance if you are using the funds to purchase more real estate and will be the person managing it, then perhaps you can get slightly more than the non-performing members of the company.

You can try getting 2 quotes for the rehab.  I  had a situation where I ended up getting 3 quotes to rehab my building.  2 came in around the same price while the 3rd came in almost 50% higher.  I used the higher quote and then told the bank after that I had a disagreement with the contractor and switched to another.  The lender did not have any issue as they are still making their money.  Every draw that I do now adds some cushion to my operating account, enough to cover carrying costs if needed.

FYI I was very upfront with my lender regarding the multiple quotes and why I had chosen to originally work with the higher priced option.  I ended up changing contractors prior to any work being started and the lender was very aware of everything I was doing.  Nothing fraudulent happening.  

HI BP,

Im sure this has been covered already but I am looking for some lenders in Ohio who would be willing to do a shorter seasoning period than 6 months on a BRRRR. The property in question is a 12 (possibly 13) unit apt building going through a full renovation. If I can do a refi-cash out in 3 months vs 6 months I will save roughly 7k a month on carrying costs, which would make the deal even better. I have enough budget for at least 6 months of carrying costs but of course if I can cash-out sooner I can move on to another project and save quite a bit of money in carrying costs which will go to my bottom line.

Looking to obviously cash-out from the appraised value after the renovation.  I know there are lenders who will give me a mortgage on the property prior to 6 months, but it will be based on the purchase price and not the appriased value.  

If anyone knows of any lenders in Ohio who would be willing to do a cash-out refi on Appraised value please send me their info so I can reach out and get things moving.

Still going strong on my BRRRR's. The one I'm currently working on should be able to refi-cash out more than I put in and it will still cash-flow after debt expenses. This is an apartment building though and not a SFH or duplex.

@Jeff Copeland Thank you for the info.  I was assuming that, but just wanted to make sure.

So I started a investment company for real estate. The strategy of the company is to mainly do BRRRR deals. Along the way I have come across a lot of deals that would be great fix and flips but was wondering how the income would work when it comes to taxes. The idea is that the BRRRR properties would generate a paper loss yearly (with depreciation, etc.), would I be able to use the "loss" to offset any profit I make from a fix and flip in the same year?

Example:

Purchased 12 unit apt building.  After renovation and cash-out refi and cost segregation study, will show a significant loss (est. 150-200k loss), can I do a fix and flip that makes roughly 100k in profit.  If so would I have to pay taxes on the 100k profit considering I show a loss from the buy and hold property?

Just looking for clarification.  I am planning on meeting with my CPA soon.

Was thinking of this but for Avocados and Lemons (primarily what is grown around my area).  Avocado orchards are popping up all over the place.  There are companies that can be hired to manage the entire orchard from planting, growing, maintaining, harvesting and selling the crop.  So essentially the land owner gets the full tax benefits of owning the orchard and income from the crop itself.  Although from planting to fruit production, I have heard that it can take anywhere from 3-5 years.  Which means 3-5 years of losses for the property.

I guess it depends on what your needs are.  Do you need a house, or can you rent?  Once you make that decision, I would then talk to a commercial realtor in your area to get an idea of the demand for flex space is.  They can typically tell you that there is so much demand and it will rent for roughly $x per square foot.  This can help you calculate your income from the building. 

Flex space will more than likely bring in significantly more income than the cheap house, but its a matter of finding the right tenant.  You don't want to put all that money in and then not be able to find a tenant.  On the other hand, the house will rent as people always need housing.  

Both strategies are good.  One is obviously slower than the other, but again it all depends on what your final goal is.