All Forum Posts by: Brian Barfoot

Hi all,

     So far all of my experience has been with single family houses renting to what would probably be called B-class tenants. People I'd enjoy having a beer with or maybe even inviting over to dinner if they weren't tenants of mine. The thing is, I'm starting to see very good opportunities in neighborhoods where I'd have to rent to a different level of tenant. It seems hard to pass on a triplex that's selling for 65K and pulls in 2K a month but I don't want to personally deal with the issues that might come up in that neighborhood (possible drugs, crime, etc.) I've never used a property management company but this seems like the place to do it so:

     What do any of you typically pay to have someone else manage your properties?

Is it worth it in your opinion/experience?

Do they itemize (x dollars for screening/showing and then another x dollars for maintenance) or is it typically just a package deal?

Any other things I should be extra careful about when getting into this situation?

I'm open to all suggestions here as it's new territory.

Right. Obviously I have no desire or intention to commit fraud. I want things to be clear and certainly legal. What I hear everyone saying is that you typically make an agreement with a private lender (friends and family style is my plan in this early stage) and then bring that agreement into the conversation with the mortgage broker.

A sub-question is how do you make the agreement with the friend/family member a legal agreement. I've heard some things about how we can't make loans with interest as individuals without ruffling SEC feathers. Do I need to enter into a legal partnership? Offer shares in the LLC?

Hi all,

       I'm being told that if I am going to take on private money that it's best to have it in my account three months before starting the prequalification process to avoid the "no gift money for an investment property" rule. This seems like an absurdly long time and I'm wondering how people get around this. Do you front the money from your own funds in some creative way and then pay yourselves back when the private money comes in? Is there an exception to the rule that my mortgage originator isn't telling me about?

Background info: I'm looking to pick up my third house and in this market I would be buying in the 30-80K range. I have some cash reserves and a line of credit that I could leverage if necessary but not enough to get 20% down plus closing costs on a house in the upper end of that range.

Thanks,

        Brian

I'm interested in this from the other end of the relationship. I have a friend who would like to immigrate in a few years and he is thinking that getting a few buy and hold properties will be part of his income stream once he does. If I want to invest with him before he comes over, should we form a new LLC together or should I find a way to absorb him as a part of the LLC I currently have (either as hard money or shares distribution?)