All Forum Posts by: Bryan Lyde

Definitely get an informed opinion from a good lawyer (you should have one on your team if you plan on adding more). If the property is in your name it's not just the property up for grabs if you're sued by a tenant or say a car wreck victim. Everything you own except your retirement accounts are fair game. Personally I couldnt sleep at night with that on my head, insurance or not. Layers of protection should be the norm.

As for the insurance side of things, it is true that pricing is higher for LLC based insurance however there is a way around that by keeping it in your name but adding the LLC as an additional insured on the policy.

I am neither a lawyer or insurance broker so get investor friendly members on your team for each. I also recommend reading Garrett Sutton's books starting a corporation and loopholes of real estate. Excellent information in both.

I agree with Bruce on this one. There are 2 loops in Dallas, loop 12 the inner loop and I-635 the outer loop. On fort worth side it's 820. I focus outside of these loops unless it's an opportunity zone (many around southern dallas proper) and has at least 1.5% rent/price ratio. Tough to find right now but I suggest getting hooked up with a realtor who can build an ongoing report for 2-4 door properties in MLS. I use Beth Record from Remax and she's great!

Erick, just noticed you are from Rockwall. I highly recommend my lawyer Kyle Carlton if you don't have one. Last years D magazine best lawyer in Dallas and very real estate focused among other things. He did my trust as well.

https://txwealthlawyers.com/attorneys/

From your comment on the capital being used for multiple deals it sounds like a JV is in order. The lender is likely going to want collateral so in my dealings we had the title company lawyer draw up a mortgage, and promissory note detailing the terms of the agreement and the deed filed with the county. Your lender may also request a personal guarantee document and a deed in lieu of foreclosure doc to further protect their capital until you have multiple deals with them under your belt. At completion of the project/s (assuming flip here) the PM lender will provide a payoff statement summarizing what's owed, and often the original note with paid in full on it and sometimes the original deed upon closing. I assume the process is the same with multiple investments as it is with one since each time they fund a purchase or rehab draw, they will want it documented for protection. If you don't have a good real estate lawyer on your team already get one; will save you lots of trouble down the road.

IMHO you never put a tax shelter in a tax shelter per tom wheelwright. In other words, use your solo to do private lending deals, passive investing in syndications, tax liens, etc but do not hold an actual property as you are negating the benefits of depreciation. Highly suggest getting a copy of Tom's book tax free wealth. Very eye opening. And kudos on the solo401k choice since an SD-IRA will have UBIT tax consequences to consider.

This is an area of focus for me as well for 1-4 door properties. I have found that there is a lot of activity within a few squares miles of avenue B and D. Wholesalers mostly but rents are strong for updated properties and oddly you will be battling with retail buyers for even outdated properties with good "bones" because of all the 203K loan programs available which provide up to 35K in rehab as part of the primary mortgage. I am being outbid with cash offers often 20% above list which means there's no margin for flippers thus my suspicion of retail buyers.

Similar results here for collin county with the exception of 2016 from the hail storms. I use a local agent to pull a favorable CMA and file a protest myself but everything is inflated and selling over list so it's hard to "create" a good CMA.

One thing that did work for me was the timing of the updates I made as part of a remodel after the hail damage. New roof, HVAC, and a new patio cover in the back. They added the value of the patio "improvements"  from aerial imaging. I successfully argued with paperwork showing the project was not yet complete at the end of 2016 and therefore not applicable for 2017's assessment.

I think you're asking an astute question. which is really what task has the highest return, ie hourly rate, and outsourcing everything else.

I look at deal flow and marketing this way. I could spend a lot of time and money there and end up effectively making 20-50hr on that task. or find a great wholesaler or 3 who are already better, faster, and connected, and pay the $5k on the deal.it's a wash in terms of dollars but now my time is free to focus on higher income producing activity. if I spend 10 hours all in on a deal by outsourcing the marketing and sales calls and make 20k in profit or equity that's 2 grand an hour. where would you rather focus your time?

If you have a relationship with the ex-couple, meaning they know that you know they're splitting up but not perhaps they're in trouble, and they also know you are an investor then have a conversation with both and see if they will open up on the finances and what they would like to happen. Best approach I would think is purchase at numbers that work for you and lease back to the mom so she doesnt have to moveout. Get the lease to cover your holding costs at a minimum if you're in the flipping game, or offer lease to own if she wants to stay until she's back on her feet.

The best solution is probably the one that causes the least stress and upheaval which is the last thing that family needs right now. 

I would move quickly whatever you're going to do, the house has 90% equity so it's on a list, and if they've filed papers already they're on another list which will make the sharks salivate. Perfect storm of high equity and motivated seller

Good luck and let us know how it turns out.

@Anthony Wick, in my view the 7% paper return isn't net; its minus cap gains or whatever the longer term tax rate will be when pulled from a QRP. It would also be offset by the return on the RE investment if done relatively soon after liquidation).

I would say if the REI investment is done right, returns should be above 20% (combination of Cashflow, mortgage paydown, appreciation, depreciation).

Heck, find a good market and a 20% down payment on a property that appreciates 5% is a 25% return alone on that money. Not that anyone should count on appreciation; just an illustration of how easy it is to hit well above paper market rates.

I'll see if I can find a link to an online resource that compares the two scenarios. seems like schwab or TD had something...