All Forum Posts by: Christian Stoecklein

@Anthony Casa find an attorney who has syndication experience. They will have agreements off the shelf. The waterfall of cash flows with the promote needs properly documented in the operating agreement and legally structured. Plus you may want separate agreements for the asset management and property services. You probably want a separate LLC you own to render the property and AM services. A disregarded LLC that owns the asset might be useful in some cases as well.

Christian

@Anthony Casa I haven't seen JV's used. Typically you see LLCs...some disregarded and often a separate property management company if dealing with multiple properties being self managed. Not sure your goals and what each party is bringing to the table.

Christian

@Rachel Wudarczyk this question is often debated on the forums. Often you will hear people say if you just have a couple single family rentals that you may be better off keeping it in your name. This keeps it simple and makes it easier to get financing. Many will chime in with more complicated approaches that probably work fine but may be overkill based upon whatever your personal situation is.....net worth, rental cash flows, etc.

I noticed your profile referenced flipper. You may want a LLC or LLC treated as a S corp if you are doing flipping. That's probably the biggest priority. Talk to a lawyer and CPA if flipping.

Christian

@Basit Siddiqi good recommendations.

Christian

@Shane R Williamson 25% equity is a good balance. Many people on here use more leverage but 75% LTV will get you the best rates and give you cushion on your cash flow.

The LLC doesn't really impact your tax deductions but will result in higher interest rate and insurance if you are buying 1-4 unit rentals. Also some administrative costs such as annual filling fees, etc. Talk to your CPA, lawyer and insurance agent for advice if the cost benefit is right for you.

Christian Stoecklein

@Kyle Belles this a really good plan. This should be easy and low risk. Low downside and high upside.

Financing - your rate may be a little low or maybe the rate is good but the fees will be higher or they will want 25% down. Make some calls and validate since you will need a pre-approval anyway.

The rent at $1,400 might be low but I don't have enough facts to say. I can send you my realtor if interested.

Christian Stoecklein

StoeckleinCPA.com

@Dilini Sundaram revenue raisers were removed from the infrastructure bill. That means there will be a separate budget bill later this year that will go through reconciliation. Although this means it will be unilateral with just democrats, it will still be highly negotiated and will take time. The closer to the end of the year this process moves the more likely it is this will start next year. Further it is very likely that the 39% rate proposed will decrease to something more like 25% or 28%.

Christian

@Benjamin Klos I buy the water and gas line insurance also.

@Benjamin Klos I buy it. Its cheap and covers a real risk.

Christian

@Kyle Belles. I recently bought in Charlotte.

Make sure you have a clear investment thesis. Meaning what returns you are looking for. The asset type... single family or small multi family. The age of the property. The quality of the sub-market....crime, schools, access to public transit, etc. And lastly how much of any value add you want to do. Put that all down on paper and you will narrow your search and help you with your discussions with agents, etc.

On the appreciation in CLT, there are a number of strong long-term macroeconomic trends. So I think as long-term buy and hold I think that's very important. Regarding the short-term appreciation, this was driven by both supply and demand issues. I wouldn't consider appreciation like that in the future in your models. But many are not predicting a correction because of the imbalance in the demand for housing in CLT vs. the practical limits in supply.

I think the biggest risk would be you see the rental rates come down causing you short term cash flows issues. So consider running your returns and cash flows with a few scenarios including a shock of your rental rates for a few years.

Christian Stoecklein

Www.Stoeckleincpa.com