All Forum Posts by: Andrew Slezak

Quote from @Jonathan Greene:

I believe your loan could get called if you transfer ownership to an LLC without consent of the lender, especially a brand new LLC that does not have two years of tax returns.

Awesome! Thanks for the heads up, I’ll call the mortgage companies. 

Hey yall,

my wife and I started off in real estate as house hacking. My first property was a duplex, and then a year or so later she bought her house, and we moved in together living in MIL suite basement and rented out the rest of the house. We have since relocated and the properties are strictly used for rental. We created an LLC because it seemed like the right thing to do and we're looking to grow our rental portfolio now. I'd like to transfer the properties under the LLC now.

Do I go about doing this by performing a Quit Claim Deed? If so, am I selling/transferring the title or am I just adding the entity to the title?

Thank you in advance

Quote from @Yents Ybrimovic:

@Nicholas L.

I'm recieving the exact 1:1 in equity.. I would just be spending half as much and getting half as much equity. With half the risk. 

Me and my partner both bring things to the table that the others don't. I have a background in finance for deal analysis/keeping finances in order. I have tons of connections with people who do marketing all over the city I live in. My friend knows just about every contractor within 2 hours of us and can likely fix small problems that come up. I work/travel for 6 months out of the year, so I am off for 6 months and working 12s for 6 months. I would be able to manage the finances, marketing and showings even while working but maybe not attend to the small stuff such as getting a random call to fix something stupid at 3pm when I'm 6 hours out of town or on my 30th day of night shift 12s. 

I am more than willing to do something like this on my own in the next couple of years when I am ready but we are looking to get started now. We will buy a single family house like I talked about and then analyze other deals. I just do not want to take this possibility off the table if it could help us really get moving in terms of number of doors we have rented out (a 2/3/4 door rental is an exponential increase in our cash flow, compared to the single family home we are planning to buy first). 

If I uncomplicated the situation a little, do you have any advice on how we could make something like that work?

I think the first problem you’ll run into is using an FHA LOAN through a partnership entity. If you or him are just giving each other money with no legal documents in place so you can scoot buy and get in, then good luck to you both. My 2 cents is right there with the other guy, get into something on your own first to test the waters and know what it’s like to actually buy and do some work. Maybe the partnership is you buy the property, house hack it, and you pay him to manage the work. Now you are both making money and he gets practice managing the work load. 

another thing to consider- why force the situation? Interest rates are high relative to house prices, this won’t last forever. 

Quote from @Tom S.:

@Cheryl J McGrath Personally I don't see why any RTO buyer would enter into an agreement and put down money if you don't own the house yet. If the R2O buyer gives notice on their current place and your deal falls through at the last minute, those tenants would be scrambling to look for a place to live.

I second this, not a good luck to just rush something through. Patience is a virtue. 

Quote from @Dakota Williams:

Hello community!
New investor here need advice on a deal I am about to do. Feel free to roast, criticize or give any advice you have I can take it. Backstory: 22 years old about to get out of military after first contract. 70k cash saved up & 775 credit score, no debt. Looking to buy duplex to live in and ultimately renovate if the numbers make sense. I am approved to use VA loan at 5.5% guaranteed. Here are the numbers:

Purchase price: 300k @5.5% (might be able to negotiate new exterior paint job credit)

Monthly costs: mortgage- 1703 tax-245 (2933/yr) insurance- 167

Market rents are 1600$ easy for both sides as is but currently being rented at 1410 and 1325 tenets pay all utilities (separately metered)

Planning on putting aside 20% of rents for Maint, vacancy, capex and will be self managing property.

Property is fine as is but if fully renovated in my market I estimate 500k-550k ARV. This is a 2500 sq foot 3 bed 2 bath both sides. After renovation rents would be 1900-2000$ so about 4,000$ total rent for both units. If I did the BRRRR method would this work out perfect? 300k purchase + 10-15k closing + 80k remodel + 5k for refinance costs. 80k remodel number I got from my father who is a general contractor in the area. 500k ARV x .80% refi (because it would be my primary residence) = 400k minus 15k closing, 80k remodel, 5k refi cost = 300k my original purchase price.

Property details: 3 bed 2 bath both sides with attached garages, aluminum siding, copper plumbing, 1972 construction, separately metered, all electric water heater, range, dryer, public water and public sewer on a slab foundation in a great school district right next to brand new construction everywhere.

My only cash investment would be the 10-15k of closing costs as of right now. I am very very new this is the first house I am ever buying.

Any advice is welcome. Am I getting a good deal as is? Should I keep it as is or renovate? Do numbers look accurate?
thanks!

Do it. Seems like you have a good head on your shoulders. My first home was a duplex that I bought in the hood of Chattanooga. It was a great experience to live there which is a story for another time. But I feel like you really can’t go wrong with VA/FHA on any type of multifamily. The amount of money you put down makes it hard not to do well for cash on cash. As mentioned earlier, I’d never expect appreciation and only go for cash flow on the multi family. Clean it up a bit to get most bang for the buck add ons and preventative damage items like water leaks. I’m big on curb appeal, and master bathroom space. In short, if you’re comfortable relocating one of the sides to move in, and comfortable to live in the place, than just do it. Keep saving money and just keep it rolling. 

Quote from @Xavier Noel:

@Andrew Slezak, I am looking at Chattanooga right now, is it where you are trying to do a BRRR or flip? What do you think of the market currently? Cheers

 Well, I no longer live there. Relocated back in March of 2023. I think it was a super hot market, both my properties back from 2021 have done well. I decided to not buy more because it became just so competitive. You’d offer asking price and it was bought cash 4% over asking. So for the dollar amount, returns, and additional risk I decided to just focus more on my day job. It’s a strong market but there’s also a lot of gang problems and cultural tension in some areas. The places I could afford I felt like I was risking buying and the area receive riff raff soon after. My perceived risk at the time whether, right, wrong, or indifferent, the reward for me just wasn’t there.

Hey Nick,

let's link up. I live over in Gadsden, frequently travel Birmingham, and dying to know what you see in Birmingham. I have 2 rentals in Chattanooga that started out as house hacks, looking to start my first BRRR or Flip by the end of this year. Also come from the construction industry on the material manufacturer side.

Hey y’all,

So it’s my first time finding a tenant for the duplex I’m house backing. I posted an add on Facebook market place and have had 10 people reply so far that are interested. Here’s the issue; I need to get this thing rented, but I’m only home 1 day out of 2 weeks and it’s Sunday. So I’ve been telling them I’m having an “open house” to come in and see it, if you like it and think you qualify, then apply. I’m back on the road for work at 6am Monday morning. And it’s been vacant for a remodel/appraisal the last 3 months. So needless to say I’m ready to put some coin in my pocket.

Anybody have some guidance on how to select somebody? What if all 10 show up and apply?! A damn good problem to have but sheesh, I can only do so much.

Interesting reads and I've been following what people are posting. As somebody who works for a building materials company, the home builders who make billions of dollars a year are not slowing down due to a lack of housing demand. In fact, they're building more because there is so much demand for new housing or "like new" housing such as a flip. I'm talking Pulte, DR Horton, David Weekly, Goodall, and of course many small local contractors. When people NEED a place to live, they'll find a way to pay for it. People NEED to work and make money, they will find a way to make money. I think maybe we will see a dip in the market, but not a crash. A crash will happen if everybody dumps there houses at the same time. I know for certain in the south some cities have been ravaged by tornadoes and now hurricanes. Many families have been displaced and have FEMA/Insurance checks. They need somewhere to live and have money. My point being that this is all speculation that we're going to bottom out again, but I don't see it coming. Are prices inflated? Maybe, they might drop so make conservative offers, and stock pile cash for that rainy year fund.

@Austin Wingett

Hey man, I'm also a fellow house hacker in my 20's. I bought a duplex with zero down rather than putting any money into it. Sure, it's in a rougher area than I'd like to be in but it's only for 2 years. See if your state has a zero down FHA program. I know people say always put 20% in, but if I have a duplex, the other person is paying the majority of my mortgage, and now I have more money in my pocket for when I need it, like for a real rental property. Btw, I have zero issues making my mortgage payment even without a tenant. Mortgages are cheap now, put as little down as you can, keep saving and use the cash for a different property. That's my 2 cents