All Forum Posts by: Dan Beaulieu

@Alex Washburn It's cool to read about your story! I had no idea ya'll were buyin property in CR. What an awesome place. 

We see about 75% of new partnerships go south if you have never done a deal together. Definitely tread carefully, and clearly lay out all expectations and profit splits in writing. It would be in either a Joint Venture Agreement or Operating agreement for your LLC.

In a JV, one person buys the property with a loan, or cash, and leaves the other person out of it entirely. The Joint Venture Agreement would give you an equitable interest in the property.

If creating an LLC, your operating agreement clearly outlines responsibilities and profit splits.

It is true most HML need an LLC especially for a partnership. Some can do your personal name if you search hard enough.

Seems like 240K on a 1-4 unit in Bowling Green may take you pretty far and you may not even need a loan? You're definitely on the right track though. 

You'll want to go with a commercial lender on this type of transaction so that they can be a little more flexible with the LLC stuff, no debt to income considered, basically just the cash flow of the property considered. There are a few companies offering fixed 30 yr mortgages, stated income, in an LLC, with rates around 6% right now. These products let you cash flow really well and generally are less headaches than a conforming loan.

Nice job on the numbers! Couple tidbits: 

Your closing costs will be about double that. If using financing there would be lender processing fees, origination fees, appraisal, lender's title insurance, and some other nonsense fees. Closing costs are way less for all cash deals of course. 

Nobody recommends paying retail for a turn key property in the peak of a market cycle. I'd try to get it with a good amount of built in equity. Remember the age old saying in real estate investing is that you "make money when you buy." But if you're in it for the long haul, are OK with parting with 50K, want to grow slowly and steadily, and don't try to sell if you get upside down, then this looks like a nice little property. Knoxville is on fire right now with some big things happening for job growth, and I'm very optimistic about buy / holds there. 

Thank you for the recommendation @Luka Milicevic !

Talk to Mike Todd with IRA Innovations. He is the Go-To guy for self directed IRAs and investing in real estate with it. BRRRR will be difficult because you will have to put a non-recourse loan on it, which come with higher interest rates and they typically are at a much lower LTV

@Kyle Robins That is killer! I do a lot of deals in Clarksville, so feel free to reach out any time for some advice. Best of luck! 

Spot On. I always advise my clients to go ahead and make "cash" offers with a 7-10 day closing time. It's all the same to the seller, and local title companies do not care. It makes your offer just as competitive. Also make sure you're seeing some deals from local wholesalers! I usually forward the best ones on to my clients, and there are still some good deals being put out there by them. 

@Grace Thorstad That is excellent! Thank you for explaining that! It's rad that you have a VA loan on a rental property from the getgo.

Just curious... VA rules require you to certify that you will use the house as your primary residence. How did you find a way around that?

@Michael Skvorak Thank you so much for putting this together. Hopefully I can make it!