All Forum Posts by: Bellman Tumasang

Wouldn’t it be more profitable if for each apartment unit in an apartment building I rent them out by rooms rather than units. If so why doesn’t everyone do this.

For example let’s say I had a 4 bedroom unit in an apartment building renting for $2k a month. Wouldn’t it be better if I just rent out each room for $800 a month and make $3200 a month for the 4 rooms. 

Also as commercial real estate value is heavily focused on NOI renting by rooms could boost NOI and could force more appreciation and allow investors to perhaps refinance quicker and at higher valuations allowing them to do the BRRRR strategy to buy more buildings and repeat building wealth.

 From a simple google search it seems like PNC is a bank. Don’t you use electronic software for tenants to pay rent and make maintenance requests?

Ok. How many properties and units do you own and what type of real estate do you invest in? Commercial? Residential? Multi family? Office? Single Family Rentals?

Do you hold each property in its own Property LLC with its own bank account? What bank do you use for your real estate and what type of account is it? Do you use an umbrella/holding LLC structure where the Holding LLC is owned by you and the Holding LLC owns each property LLC which owns 1 property per LLC?

How do you do cash out refinances or 1031 exchanges with this structure?

You said you collect rent using an electronic format so I’m assuming software such as AppFolio or Buildium etc which can allow tenants to complete rental applications online and pay rent online.

In your lease do you specify that all tenants must pay in an electronic format whether it’s perhaps signing up to a service like AppFolio and using that. Is that allowed? Property software like AppFolio etc allows tenants to make maintenance requests online with their software on desktop or their mobile app. 

Do you use a property management company? If so do they collect rent? If they collected rent using software such as AppFolio I believe you could delegate some controls and watch everything they do especially relating to finances to make sure they take their correct fee and pay you the right amount.

What procedures and formalities do you follow when investing in rental real estate?

How long do you usually take to close a deal from beginning to end?

1 - Finding and underwriting the deal (Are you email lists of brokers who mail you deals every now and then and if so what makes a deal worth pursuing does the broker send the property’s financials you just plug into excel and if it looks good you tour the property and how)

2 - Touring the property (How long do you take to tour the property maybe a week and what do you look for, damages, do you speak to tenants to assess them or ask what they pay in rent, do you look at any improvements that may need to be made?)

3 - Financing the property (Did you have to get a preapproval to know how much you could borrow and what properties you could afford before you started browsing deals?, 

Do you send your lender your underwriting, do you form the LLC's to take title to the property and financing etc, Discussing interest rates and nonrecourse/recourse loans,

How long does it take to fully complete the financing and receive the funds and how much closing time does the seller give you and can you extend that time if the financing for example is taking a while to close?)

4 - Closing (After all paperwork is done and entities are formed and loan proceeds are received etc and you’ve bought the property and exchanged keys.

How do you tell your tenants your the new owner and they should pay you rent or you perhaps increase it and you want them to perhaps pay by cash, cheque or an online portal, How would you fire the existing property manager if they were doing a bad job and you wanted to get a new one or negotiate fees etc?)

Please state what is required for each process and how long reasonable each take and how long in total it would take me to buy a deal perhaps maybe 1-3 months.

Sorry for the long post. Please do your best to answer each question or tag someone who does please.

Ok thanks. Btw I was not thinking about tax avoidance but asset protection. If each property is held in an LLC created for each property which is owned by the holding company then all my properties are protected from each other.

I was doing research a few months ago and read somewhere that if a company such as Company A owns 80% or more such as 100% of another company such as Company B then Company B is legally a subsidiary of Company A and all distributions to the holding company Company A would be tax free.

If you or anyone else has experience or knowledge of this please feel free to correct me and provide advice please.

Also what is meant by Occam’s Razor?

If I own my properties via an investment holding company that owns subsidiaries that take title to my properties can I do a property cash out refinance and pay the proceeds to the holding company tax free to buy more properties that are fully owned by the holding company to protect each of my properties from each other.

Would an LLC or Corporation structure be preferred for this to work?

I want to invest in commercial property such as apartment buildings and have been reading that I’ll need to get preapproved first to know how much I can expect to borrow and interest rates etc. 

Anyone with experience please help out and give me some advice please. I am currently 18 and want to save up to invest in real estate.

I'm going to use an example to make things easier assuming I have a real estate holding company called Holding LLC which 100% owns and manager manages Property 1 LLC and Property 2 LLC which own Property 1 and 2.

Let's say I bought property 2 for $500k with $100k down and financed $400k. After a couple years it's worth $600k and my remaining loan balance is $350k. If I refinance Property 2 at an 80% LTV with it being worth $600k the new loan would be $480k and after paying off the old loan balance of $350k I should have $130k.

However, that $130k I may want to use it as a 20% downpayment for a $650k property. Since the equity pulled out is payed to property 2 LLC and I want to purchase Property 3 and create Property 3 LLC could I purchase Property 3 where Property 3 LLC is funded by the $130k downpayment from Property 2 LLC then transfer the ownership of Property 3 LLC to Holding LLC so all properties are completely separate.

Or could I just simplify and pay the $130k from Property 2 LLC to Holding LLC then use that $130k from Holding LLC to fund Property 3 LLC to purchase Property 3 and have Property 3 LLC 100% owned and manager managed by Holding LLC.

If I want to perform a cash out refinance to pull out equity out of a deal and perhaps purchase another property what are the steps necessary and how long does it take?

Please DM ME I am not advertising or selling anything. I just want to get more information that’s all. Anyone experienced or knows a good amount about a cash out refinance please message me and I’ll respond ASAP. You can just message and say CASH OUT REFINANCE. I’ll rather you message me than me message you as it’s quicker.