All Forum Posts by: Christian Weber

Agent out of state I was speaking with told me I would have to sign a buyers agreement that states they must make a min of x amount on a deal and if not I make the difference up (plus office fee). Home are around the 75-100k

Is this normal as if anything I was going to ask for a referral fee but noticing how low the prices was I was going to not do that.

Just wondering if this is standard practice, I personally dont use those contracts myself with my buyers as if the house doesnt pay enough I dont want my buyer to pay. I will make it up on the next transaction.

Thoughts please

0 Votes

Originally posted by @Jonathan Greene:

You can't buy in the name of an LLC, with a mortgage, with less than two years of tax returns on that LLC in most cases. Sometimes with a community bank, they might allow it if you have an existing relationship, but most of the time not.

Thank you - question. How would I have a home in an LLC then. many people here talk about putting the homes in an LLC to help prevent a tenant going after all their properties - thank you

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Originally posted by @Scott M.:

Question - do I buy it in an LLC or in my name with an umbrella policy

- These two are not mutually exclusive. Should get an umbrella policy regardless of the ownership structure. That said a conventional mortgage will be in your name not an LLC.

Do I set up separate bank account for it

- Yes, I think you should will help you keep things separate and not co-mingle. Also easier at tax time.

Do I get a separate credit card for it

- Yes.

Thank you - so im guessing the mortgage is in my name but the property would be in an LLC? Trying to understand how people buy homes in an LLC to avoid a tenant going after them and their other properties

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Originally posted by @Stephanie P.:

Originally posted by @Christian Weber:

So question - buying first investment property with 10% down conventional

Question - do I buy it in an LLC or in my name with an umbrella policy

Do I set up separate bank account for it

Do I get a separate credit card for it

The unit already has a tenant in it with 11 months left on the lease.

Thanks for answering the dumb questions

Conventional financing doesn't allow you to only put down 10% on an investment property unless you're using it as a 2nd home and then you have to live there for some period during the year.

Just go with an umbrella liability policy.

You can get the separate credit card for it, but it's not necessary. It would probably allow for easier bookkeeping.

Hopefully the tenant is paying their rent.

Thank you for replying - I just read online that you want the property in an LLC incase something goes wrong. Would the mortgage be in my name and then the property be in the LLC? How would that work

Thanks

0 Votes

So question - buying first investment property with 10% down conventional

Question - do I buy it in an LLC or in my name with an umbrella policy

Do I set up separate bank account for it

Do I get a separate credit card for it

The unit already has a tenant in it with 11 months left on the lease.

Thanks for answering the dumb questions

1 Vote

Originally posted by @Preetham Gowda:

You have mentioned that you will need a property management company to lease and manage. Even at 8% PPM and 15 day rent for leasing and 2 year turnover average, thats another $160 a month. You have not considered insurance, vacancy, opex and capex. Even with the tenants paying rent, this will be pretty tight to cashflow. If you are ok being CF-Zero, but are in an appreciating market it may still work out. It all comes down to your investment goals.

Valid - I had pumped into a calculator 10% management, 6% maintenance, 9% vacancy

Tenant pays all utilities, garbage etc

Its the HOA that messes it up. It just was over the 1% rule and I didnt know how much the HOA would effect the result

0 Votes

Originally posted by @David C.:

Originally posted by @Christian Weber:

Florida - Condo - 2 bed / 2 bath - $79,000

HOA $260 per month (im aware HOA dont normally make good deals)

Taxes $780 (will jump up to 900 after sale most likely - not currently homesteaded)

Would need an good estimate for expected expenses (is the tenant paying all utilities, etc).

Just from the numbers alone monthly:

$1000 rent - ($260) HOA fee, and approximately ($95 Taxes), mortgage around ($275), that leaves you with $375 monthly before other expenses (Insurance, sewer, garbage, etc). So it really depends on your expenses. You also need to factor in vacancy as well. Too many unknowns for a good answer, but thats the best I can do.

So I would stick in 9% vacancy (there it no HOA approval period and the unit generally rents in 2 weeks so a 1 month vacancy seems valid)

Tenant pays all utilities, garbage, will have renters insurance

0 Votes

Florida - Condo - 2 bed / 2 bath - $79,000

HOA $260 per month (im aware HOA dont normally make good deals)

Taxes $780 (will jump up to 900 after sale most likely - not currently homesteaded)

Current tenant just signed 12 month lease - $1k a month

I would put 20/25%

B Class neighbourhood I would guess / low crime on truly website and schools 5/10

Renovated kitchen and bedrooms in the last year

on paper is seems like an ok Deal - thoughts please

I would need a property management company

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Originally posted by @Theresa Harris:

I don't know US tax laws, but I know where I am there are people who build homes, live in them for a few years (might be 2, but could be a bit longer) and then sell them. There is a tax law and capital gains clause. Guessing that might be what he's taking advantage of in the US. He'd have to add a lot of value for it to make financial sense as you have all the lawyer and realtor fees to pay plus moving expenses.

If he can sell it and walk away with $50K tax free for 2 years vs renting it out where he'd get a few thousand a year, he'd coming out ahead with the live-in flip.

I think he comes out way ahead on that, makes sense and I guess it gets the cash recirculating out to do more flips. Its just crazy how we had the same job (similar income) and within 3 years (and a bit of luck he found an investor) he went from 1-3 flips a year to 10+

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Originally posted by @Mason Hickman:

@Christian Weber

If he’s doing that many flips, it sounds like he is probably adding a fair amount of value to his “live-in flip” and then selling off without paying capital gains. Everyone has different goals and he is probably in the cash accumulation phase. Rather than speculate, why not ask him directly?

I just wanted to find out other reasons, thats kinda what he said but wanted to know the math on it from other people.

0 Votes

All Forum Posts by: Christian Weber

Christian Weber has started 21 posts and replied 64 times.

Post: Do I pay the agent as a buyer?

Post: Identified first property - setting up the admin

Post: Identified first property - setting up the admin

Post: Identified first property - setting up the admin

Post: Identified first property - setting up the admin

Post: Does this deal make sense - another set of eyes please :)

Post: Does this deal make sense - another set of eyes please :)

Post: Does this deal make sense - another set of eyes please :)

Post: Selling Every 2 years - Pro's and Con's

Post: Selling Every 2 years - Pro's and Con's