All Forum Posts by: Stan Butler

Some good advice in this thread.  A few points:

I think the exemptions to the DOSC that @Bill Gulley you need to look at community banks and small lenders. You are looking for a portfolio loan, because it doesnt meet the industry standards for residential lending and thus cannot be easily sold on the debt market. These should be pretty easy to find almost anywhere. You can vest the title in your LLC and the Security Deed and Note can be recorded in your LLC name, but the lender will have you sign a Personal Guarantee. Typical terms will be 20-yr amortization with either 35, 60, or sometimes no balloon and the rates will be higher than conforming loans (about 1.5-2%).

That's a very strange combination of tenants.  Why would a newly engaged couple want a "roomate"?  Actually, maybe I don't want to know.

Are they asking you to let them move in before they get you the money??  or are they asking you to just to hold the property for them until they get funds??

My policy is always the first money in my hand gets the property.  So I would communicate to them that they have been approved but that you cannot hold the property for them.  Its a major red flag to me when people cannot come up with the money needed to secure the property.  That usually means I will have trouble collecting rent from them during their period of residency.

@Vince Beusan yes that is what I mean.  I got the tip from a Property Manager that I trust, but I had no faith that it would make a difference.  Surprisingly, I have not had anymore debates with the tenants over the rent in the last month of their lease.  Must be the psychology of the tenant knowing that they owe money.

 I have tried this strategy as well many years ago, but it didn't solve the problem.  Tenants will still ask you to apply it to the last months rent and send them the difference.  As strange as this sounds, charging a Security Deposit that is slightly less (like $100) than the rent has solved that problem for me.

Rent does not scale with the price of the home, so a $200k house is not going to rent for twice as much as a $100k house.  In my target areas you could never achieve a 2% rent, but you could get 1.5% on a great deal and have great cash flow.  I think the key is to find the "sweet spot" in your target market and look for properties.  If you can find one that meets your investment criteria then who cares what % it is.

I second the thanks from @Cal C. 

Great job @Azeez K. in putting everything together!  It was great to put some faces with some frequent posters on the boards.

(thats 2 'mentions')

This is just something that my general contractor is able to do.  He has done many of them over the past several years for other clients.  One additional thing that you may want to research is if this requires a permit for your area.  This is definitely something that you want to do correctly as @Bill Gulley stated above.  He definitely knows what he is talking about.

Almost forgot, one more thing to consider is the removal of the actual pool equipment.  You may have to cap off or remove some gas lines or electrical wiring from the house to the equipment.  You cant just leave hot wiring buried in the ground.

Hey @Julie Kern that sounds like a good first deal.  Your annual yield is around 13% based on $1,100 monthly rent and $100k investment.  That number is very consistent with what we are seeing for good areas.  We just finished a rental acquisition and rehab in Acworth ourselves.  We put it on the market and had a nice selection of tenants to choose from after the first two weekends.

Hey @Mark Bosworth you can use the concrete decking to fill in the pool because it doesnt biodegrade over time, but it wont take up as much room as you think.  You are still going to need dump truck loads of dirt to fill it up.  In the several estimates that I have gotten, the only thing that varies is the labor cost.  If they can back the dump truck right up to the pool, thats the cheapest.  The next cheapest is if they can use a bobcat to move the dirt from the dump location to the pool.  The most expensive (by far) is if they have to wheelbarrow in the dirt from the dump location,  Hope this helps...

@Ryan E. I am not sure if you need to apply for EIN for Single Member LLC since it would flow through to your SSN on taxes anyway. Also, I noticed that you plan to setup an Escrow Account for Security Deposits, which is a great idea, but I dont think its required in Georgia until you get to a certain number of properties. Overall, the plan seems sound.