All Forum Posts by: Carlin Randolph

I have found attorneys through varying methods in different markets.

I would say the best i've experienced is by word of mouth. This really is a relationship business. If you have no one to ask in your market, speak with someone who has no vested interest in any attorney but can see their business dealings clearly. ie- Call a title officer/company in the area (x's 20) and ask: "What do you know about efficient and knowledgeable attorneys that have closed in your office?"

You will get a name. But the magic happens when you actually call 20 offices and the same name keeps coming up.

Hello @Nick Scaramella. You can, in theory close on a house and walk over to the bank to refinance. It seems like your goal is some version of a cash out refi or the brrr strategy. Many banks will refi the home any time in the first year. (Check local banks and credit unions. They have more flexibility).

However, until 12 months have elapsed from closing, the banks' value for the property is only as high as exactly what you paid for it. On the 2nd day of the 13th month, you can have it appraised for more than you paid. Again, if you look around...reallly look around, you can find a bank to do it after 6 months. 

Think about it this way: The value of something is what someone is willing to pay for it. So if you just paid a price for something, you've set the value for the time being. Just as a caveat, private lenders will do almost anything if the terms are right for them.

I hope this helps

CR

Hi @Kiuny Perez. It sounds like this project is a candidate for a joint venture agreement. PLEASE DO NOT download a free version online. That is a document best produced by your attorney. And when having that drafted, think first about what will happen if the deal goes sour and work your way backward to what would happen if it all went well.

Now, there is a right and a wrong way to do everything. For the right way, people usually say "thats so expensive." But the real costs come when you do it the wrong way and things go wrong.

I would say neither of you should go on the mortgage. Open an LLC structured for real estate and that LLC is going to apply for a mortgage. Make the 3 of you 1/3 partners. Thats one way.

Or, create the llc but make one person 94% owner. (That person will have to present documents for the mortgage verification.) The other two will not be listed on the mortgage but they will have 1/3 responsibility and 1/3 ownership of the deal as per the Joint venture agreement.

The other two will be free to get other mortgages and/or be the 94% owner of other llcs for another deal, because they will be minority owners having only 3% ownership each of the "LLC Partnership" for this deal. I think that was your question about the "10% you mentioned.

I hope this helps.... I hope this makes sense.
CR

@Joshua Sun yes absolutely get a business bank account. It will be easier on taxes and also smoother when it comes to hard money. They or any future co-investor do not want to deposit funds into a personal account not to mention they will only do business with an llc. One way to look like a real business is to have its own bank account. Also if any tax audit ever happens you will have a clear record of what went in/out for the flip. Third, a bank account for the business will help you keep record of how much money You’ve invested into the business and how much of a non-recourse loan you have made to the business  for expenses.  Yes get a bank account. 

Be sure to get your own estimate for the repairs, comp the property yourself using a system with real numbers. Zillow is not a reliable source for their estimate nor the sale prices they list for recently sold properties. Find out how much recent properties have sold for fixed up with similar amenities and fixtures and build type, subtract 30% for closing, minus repairs, and then minus what you want to make. Then you could offer that number to help the owner get out of their problems.

You can buy it, yes. And you will need to get a 30 yr loan that will cover your existing loan + closing fees. You will pay transfer tax and a little more than necessary if your llc recently bought it. Also, you will be personally liable for anything that goes wrong with it. We live in a money-hungry society and tenants, pedestrians, contractors, and refused tenants are looking to sue or get hurt to sue.

However,consider that the bank is more than willing to refinance that commercial loan as long as it is making an income that makes sense. Also consider that if the income is not making sense for the bank it doesn't make sense for you either. The commercial rate will be higher, yes. But again, that rental should always cover the debt service and make a profit for you. If I may ask, whyis it so important to have a 30 yr? 

@Candace Hall yes this is possible. It is usually called wholesaling.Actually, you can put less than that on a house that is for sale (Calculate about 1-2% of the purchase price) and provide to the realtor that amount in check form which is called Earnest Money Deposit (EMD.It is cash-able once the executed contracts are in hand.

Once you get a signed contract from the seller saying that they agree to sell "you or an assignee the property for" an agreed price, you then have the right to buy, sell, or control the property as you wish, allowing the rules and laws in whatever jurisdiction the property sits.

In other words, if your state/ city allows you to "wholesale" a property without any improvements, that would be pretty much your process. If they do not, there are other ways to do what amounts to the same thing. BUT KNOW that a down payment should only be paid to help you as a buyer lessen the amount of money you are going to bring to closing to pay the full amount. So, if you're not actually going to buy it, look more to pay the amount for an earnest money deposit.

Again, check the laws where the property sits.

Hope this helps...Best of luck.

@Francisco Garcia You can find a lender to refi right away. They are out there especially if you look at smaller banks, online or Hard money lenders or credit unions. I believe your challenge in refi'ing the entire property at the new value is that when it is less than 12 months, the lender is going to refinance at the purchase price. After 12 months rates may not be what you want but your options open up to whatever the new value of the house is and by the way at that point, there will be most lenders that will give you a new loan.