All Forum Posts by: Benjamin Seibert

Justin, welcome to the BiggerPockets community! I'm not from Utah but I will agree that the competition is more fierce in the market right now. I would try just creating leads outside of the norm (away from the MLS). Such as finding non-owner occupied properties and sending letters out to them. Even if it doesn't get you a deal immediately, when the market turns south and the owners need to sell properties, your name will be the first one they remember. As long as your in the position to capitalize, this can be the striking point.

I'm personally wary of the current market. I'm from a smaller market in MD and the competition is getting larger than it should be. Investors are flooding into every market, due to the easy access to capital and free cash that many have. The market is strong right now but it is a cyclical game. 

Brian,

1) This may differ slightly from the setup your looking for but I currently own a property with a friend of mine (bought coming out of college). We purchased the property as a live-in-flip to own for a couple years and fix it up (while also renting two rooms out to other friends of ours). The loan has both of our names on it and we are responsible for 50% each. The lender can't force you to make it 50-50, but it's just set up so that your both equally liable if it collapses (regardless of how much you put into the deal). Also, with our loan we had to choose one person to take the payments from (being myself). So my friend just pays me back for his portion each month. The bank didn't give us a hard time at all. It was the same process if you just purchased it yourself (other than both people had to provide their own personal information).

2) To put the property under an LLC, you could purchase it with a personal loan and then just switch it to be under an LLC. Technically this violates the due on sale clause (a clause saying that the total loan amount is due once the owner is switched), but I have never heard of a bank actually taking action on this. If you are uneasy about it, I would talk to your lender and have a quick chat with a knowledgeable real estate lawyer. Colleagues of mine have used this approach after financing a property under their name. Their main goal of setting it under the LLC. is to provide legal protection in the case of a lawsuit (at least for their purposes) as well as for tax purposes.

Hope this answered your questions!

Yea, I would find a lender and an accountant/lawyer to speak to about this. You will likely have to purchase it in your name or jointly with your sister and then rent it out to her son and the other students (to do it the correct way). Then you would likely have to claim all of the rents as income and be taxed on that. 

There may be a way for your sister to purchase it and you just structure yourself as an investor with her (possibly allowing her to rent to her son for no rent which may cut back on taxes).

I was looking to see if others had recommendations for lenders, property managers and contractors in the Hagerstown, MD area.

Lender: I have used Middletown Valley Bank before and they are easy to work with, but I feel their rates may have risen (6% on a 30 year fixed with .8 points)

Property Manager: I have worked with Valley Properties before and they have been good. I haven't had them manage one of my properties before, so I was wondering there was anyone that could attest to them or would recommend another business.

Contractors: I was looking on recommendations for contractors as the contractor I used in the past is no longer available.

Thanks!

Elliot,

I was in the same boat as you a few months ago. It really depends on what your goals are. If you want to work for a large development company or commercial management company (think Cushman Wakefield) then it may be worthwhile to get a masters. But if your getting a masters to purchase real estate with your own funds (possibly with the help of others through syndication) it may be better to abstain from a masters. You just have to decide what your goals are. For example, in my case, I decided not to pursue a masters due to the additional time it would take away from pursuing real estate as my side hobby. There is never a cut and dry response. You have to decide what your ultimate goals are. From the sound of it, you could easily excel without the masters. If you push hard enough, you could get a couple deals under your belt and be onto syndicating in no time, without the masters. You seem to be eager to learn a lot which is the most important trait. Just turn the passion into action.

I have fallen behind with posting this. I purchased my first investment property in September 2017. I went in with a roommate from college (also my best friend since Elementary School) and purchased a SFH. We purchased the house below market value to get instant equity in it (~$15k). The house is also on the best street in the neighborhood we live in and housing inventory is always low in the area.

The house is a 4 BR 3 BA. My partner and I each have our own BR and we rent out the other to BR's to friends of ours. We have almost cut out our payment entirely (including utilities). While we are living in the property, we are rehabbing many aspects of it (the basement, bathrooms, kitchen, etc...). Our goal is to cost effectively update the appearance of the house to increase the value of it for when we decide to move on and sell it. We split all costs down the middle (closing costs, rehab, etc...). 

So far everything has worked out pretty well. Just wanted to share my first deal!

I was wondering if anyone had any recommendations on any tax strategies to lessen the tax burden or creative ideas to utilize the property. Once I graduate college, my mom will be transferring me one acre of land (from my family's original plot). The one acre is in a rural area and there are at least a dozen trees on the property (but a large opening in the center). Taxes on the property run from about $700-$800 a year. There is no drilled well or any utility hookups (could tap into electrical line that runs back the lane).  The acre has dedicated road rights off of the lane that runs back to a farm; however, the lane has trees on both sides of the lane so in order to enter the property I would have to cut down a tree. The owner of the farm is not the most reasonable person, so I fear to cut down a tree I would have to go through a lawyer. One alternative to entering off of the lane is to enter my property off of a neighbors driveway but, I do not have legal permission to enter off of their lane yet so I would need to hire a surveyor/lawyer to change the land plat rights or deed. Any insight is appreciated!

@Jason Little Yes, we have looked into it. Unfortunately, due to time constraints we are mostly just looking at minor rehab (such as bringing the property up to date). We would like to purchase the property in a livable condition. 

@Andrew Johnson thank you for the advice, I definitely agree.  We are currently finishing up finals and plan to head to the bank the day we both get back home. 

@Jason Little We are looking buy an outdated property but it still be livable.  We would like to do renovations on the property but are looking more to upgrade (floors, kitchen, bathrooms, etc...) to increase the value for resale. 

My roommate and I from college are looking at purchasing a SFH together. I just wanted to see if there was anything else we weren't keeping in mind for our analysis as well as things to keep in mind during the purchasing process. Here is our thought process: we are looking at purchasing an investment property to live in and rent one room out (to another friend).

House Criteria: 3BR/2BA outdated house in neighborhood with above par school district. 

Max Purchase Cost: $250,000

Would like to have $40k-50k total in available equity through a mix of purchasing below market value and ARV (plan to have realtor pull ARV comps) (would like to eventually refinance and pull out cash so that we can both purchase another investment property)

Exit Strategy: We plan to either rent or sell the property (depending on our agreement)

Financing: We plan on using a FHA loan for 3.5% down (we have offer letters from our companies which will hopefully suffice to gain financing)

Schedule:

• 1)We are going to find a realtor in the area
• 2)Get pre-approved for financing
• 3)Make offers on homes ($40k-$50k below market or to allow $40k-$50k increase in ARV)