All Forum Posts by: Stan Butler

Hey @Cal C. there are several in our area doing portfolio loans.  They just want to make sure that you know what you are doing and have a solid financial statement.  You will have to sign personal guarantees for the notes, but everything else can be in entity name.  The rate and terms I see are similar to what @David Krulac describes above.

No, it does not make sense to separate 100 properties that way.  If I ever got to the point where I had that many properties, I could do something like this:

* 10 Multi-Member LLCs (taxable)

* Each Multi-Member LLC wholly owns 10 Single Member LLCs (rollup taxation)

* Each of the 100 Single Member LLCs hold title to one property

Again, this is just a hypothetical solution (overkill) and I dont know if it would work or not, but it accomplishes the goal of isolating liability without going overboard on the tax compliance.  It really just depends on how cost prohibitive and time consuming it is to meet your desired goal.

I use to use the daily rate strategy for collection late fees, but I found that over time it became an administrative headache.  Plus, unless I went to the PO box every day after the due date, it would never know exactly which date it was received.  Many of my tenants just drop off the rent and do not mail it.

I have now gone to a flat 10% late fee if received after the due date with eviction proceedings beginning on 11th day after due date.  This more than covers the daily amount I used to charge for the 10 days.

@Jon Holdman pretty much summed it up.

If you are being asked for some kind of Earnest Money Deposit then it would go to the Closing Attorney (or Title Company).  Any fees associated with a loan should be collected at the closing table, with an exception for the Appraisal which is often paid outside of closing.

I would use Excel and categorize everything using the appropriate values from whichever Tax Form would be applicable to your situation (Schedule E, 1065, etc...)

If you learn how to use some of the advanced Excel features like Pivot Tables and Filtering then you dont need anything more complicated if you are using cash basis.

In my case, here is what I am looking for:

Flips - I am looking for a spread on the property, a profit margin if you will. I will take the ARV and subtract a % from that number and then subtract my rehab costs to arrive at my maximum purchase price. The spread I am looking for depends on what area of town that its located in and can range from 20% to 30%. Anything more than 30% and I would never do any deals in my areas with all the competition.

Rental Property - This is just a pure yield play for me.  I take the price of the property plus any rehab needed to arrive at an Asset cost.  Then I determine if I can collect annual rent of between 12% and 15% of the Asset cost, depending on area.  In my target areas, even a former meth lab would rent in that range :-)

You are really just going to have to build a profile with your buyers to see how they operate.

I don't believe you can really stop the offers, because I think the other agent is required to present them to your agent (you).  I have seen some listings every now and then that specify they will not accept blind offers and they will compare the showing log with the agent making the offer.  Even still, I don't think you can stop someone from submitting the offer.  Its just a numbers game for those groups of investors...

I agree with both @Sam Elder and @David J. about wholesalers that transition into rehabbers or buy and hold versus wholesalers that just want to broker the deal and move onto the next one.  I have been looking for years to find a good one that can produce a steady supply of deals.  Of the few that I have worked with, a few of them transitioned into other areas of real estate, but most of them left the industry entirely.  I believe that there are a few out there, but I also believe that they fly below the radar and have a closed pool of buyers to work with.  That's probably what I would do also now that I think about it...

Great job @Morris Lucas !!

You just validated all of your hard work and determination.

Now put me on your buyers list.....  :-)

Hey @Robert Delgado it is definitely not impossible to get a loan in your LLC, you just need to work with the correct lenders. Do not waste anytime going to a large bank like Wells Fargo or BofA. You need to go to the smaller community banks in your area and find out who does portfolio loans. As others have said, they will definitely have you sign a personal guarantee for the note, but you can have the Warranty Deed, Security Deed and Note in the LLC. Another benefit of doing it this way is that it does not usually show up on your credit report.