All Forum Posts by: Charles Carillo

@Eyouel Demissie

The $30k in back rent doesn't really matter at this point since the current owner, or you will never see that money. 

If you are comfortable with the neighborhood, it comes down to the price and required renovations. I imagine all of these units are going to require pretty extensive remodeling. I would speak to contractors to understand what this will cost. I would also speak to a real estate attorney who handles evictions and see what they say. I would be looking for a price discount to compensate for the repairs, lost rent, and eviction expenses. 

It does look like this owner has given up, so possibly we are looking to just be done with it.

@Arianna Farinas

Contact a real estate attorney with experience drafting seller financing mortgage agreements.

@Angela Sammons

I am not sure if you need any property management tools for one rental unit, but I would definitely open a separate bank account to keep the funds separate from your own.

@Matthew Ray

You're currently at an 82%+ LTV. Most HELOC lenders max out at 80% or 85%. There might be some local banks and credit unions that go slightly higher.

@Jesse Hepburn

This is a tough situation, but I would not be trying to do seller financing with them, and an influx of cash from a sale is most likely not going to be beneficial for them in their current situation.

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@Sebastian Sovero

There are 3 main parts to a seller financing deal: down payment, interest rate, and price (4th would be the term). When speaking to the owner (building rapport), your main goal is to figure out which of these main 3 is most important to them. Once you learn this, you can tailor the offer to meet their needs. For example, if they really want $500k for a property, maybe offer a purchase price of $500k but a lower down payment and interest rate (and a longer-term). They are getting what they really want, and you are crafting the deal to where it will still make sense for you.

One potential issue is if what is most important to them is also important to you. For example, if they want a large down payment, and you only have enough for a 5% down payment, that is an issue. Or if they want a high-interest rate, and your numbers will not work at that interest rate, or if they really want a crazy high price where it will be difficult to cash flow and refinance in the future. This is where you need to really start working the numbers, but hopefully, you can craft a deal around what they want.

@Mark Walker

2%-3%

@Derek Bleam

Just a couple of thoughts on LLCs. 

I am not an attorney. Speak to an attorney before making any decision.

Setting up an LLC in a state with LLC anonymity is great for protecting your privacy; however, privacy is really the only additional thing you are achieving. It will not protect you or deter your property from getting sued. If your LLC is sued, you will be required to defend the LLC, your name will then become known, and the plaintiff's attorneys will amend the complaint to include you. Suppose you are personally sued; during the discovery process, you must provide information on all of your income and assets (including your LLCs in any state (with or without anonymity). Anonymity is great, but it only does so much.

@Ivar Kulla

First, you must decide whether any of the partners/investors will be passive. You must speak to an SEC attorney to set up a syndication if there are passive investors. You can set up a joint venture partnership if everyone is truly active.

Are they going to be buying, improving, and flipping land? If so, it will be nice and clean since you will be their agent. If you will be investing alongside them, you need to vet your partners before setting up a partnership. I personally would be their agent, but I am very hesitant to partner with people unless I have fully vetted them.

I would be their agent on a few deals, and then you would decide if you want to partner with them. In most cases, it probably won't go that far (most people talk), but if it does, at least you know they are serious and you understand how they operate, which will help you decide whether to partner with them in the future.