All Forum Posts by: Christopher Garcia

Thank you Diego and Landon. I will reach out to both companies. Will definitely reach out back with how it goes. Truly appreciate your time. 

Seeking CPA Recommendations for Real Estate Investment Fund and Land Flipping Business

Hello BP Community,

I’m a real estate agent and investor currently expanding my business ventures into managing an investment fund and flipping land. My businesses are growing quickly, and I realize how essential it is to have the right financial strategies and guidance in place.

I’m looking for a CPA with expertise in:

• Real estate investment funds.
• Land flipping businesses.
• Tax strategies for real estate investors.
• Structuring deals and maximizing tax advantages.

If you’ve worked with someone amazing or have any recommendations, I’d love to hear about them. Bonus points if they understand the nuances of working in Florida and South Carolina, as these are my primary markets.

Thanks in advance for your advice and referrals!

Hi Evan,

Thank you so much for taking the time to answer my post. With the debt financing they would be my bank and hold a lean. My struggle with this is that when I am calculating my exit strategy I am short. Numbers are making more sense on the Equity partnership. 

Hi Gino,

I have raised capital before but this opportunity I currently have will be a much higher amount to raise. I am having difficulty with the deal structure. Thank you very much reaching out. 

Hi Chris,
Thank you so much for getting back to me. The 70/30 was a typo so the correct split would be 80/20.  I am just very confused making my final decision of which option would be better. Any other recommendations or guidance? 

I'm in the process of setting up an investment fund and I'm considering two different deal structures to offer to potential investors. I'd love to get your feedback on which option you think is more attractive and why.

Option 1: Equity Partnership

- Target Properties: Single-family homes, multifamily properties, and land for development in prime locations.

- Investment Term: 5 years - 10 years

- Equity Split: Investor 80% / Sponsor 20%.

- Preferred Return: 8% annually to the investor.

- Profit Sharing: After the preferred return, profits are split 70% to the investor and 30% to the sponsor.

- Management Fees: 2% of gross rental income annually.

- Acquisition Fee: 2% of the purchase price.

- Disposition Fee: 1% of the sale price.

Option 2: Debt Financing with Equity Upside

- Target Properties: Single-family homes, multifamily properties, and land for development in prime locations.

- Interest Rate: 6% interest only for a term of 5 to 10 years

- Prepayment Penalty: 2% if the loan is paid within the first 3 years

- Equity Upside: Investor receives 30% equity of the appreciation

Which option do you think is more attractive and why?

I'm looking forward to hearing your thoughts and experiences. Thanks in advance for your input!

Investment Info:

Small multi-family (2-4 units) buy & hold investment.

Purchase price: $275,000
Cash invested: $80,000

Second multifamily - ADU investment. This property is conformed of a 2x1, 1x1, and 0x1.

What made you interested in investing in this type of deal?

Great investment opportunity and looking to expand.

How did you find this deal and how did you negotiate it?

I found It through the MLS and received a $5000.00 credit for inspection repairs.

How did you finance this deal?

Investment loan with 20% down.

What was the outcome?

Great cashflow and ROI.

Lessons learned? Challenges?

Always have extra cash for the unexpected.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

As a real estate agent a represented myself.

@Andrew Postell Thank you so much. I will definitely keep this in mind. 

Investment Info:

Single-family residence other investment.

Purchase price: $230,000
Cash invested: $75,000

My partner and I were able to get this deal with a whole-seller 6 months ago. Both of us are real estate agents and have experience in rehabbing. We combined our team and within a week the rehab was done. The rehab consisted of replacing the roof, changing the floor, doing a new kitchen, updating bathroom vanities, and painting the entire house.

When we purchase the house it was already rented with a good tenant so we rented a hotel room for a week that way we could rehab the house and after we were done they went back home.

Very excited to see how much the house will appraise for. I look forward to announce the great news in the next couple of weeks.

If anyone has experience in mortgage and financing, I would like to know if it is necessary to wait 6 months to do the financing.

Purchase price: $230,000.00

Down payment: $50,000.00

Rehab Cost: $25,000.00

Estimated ARV: $320,000.00 - $350,000.00

What made you interested in investing in this type of deal?

The BRRRR strategy book and podcast.

How did you find this deal and how did you negotiate it?

It was an off market deal through a whole-seller. Comparable were very good and house did not need much repair so we offered full price.

How did you finance this deal?

Hard money lender with 20% down.

How did you add value to the deal?

By rehabbing the following:
Replacing the roof, changing the floor, doing a new kitchen, updating bathroom vanities, and painting the entire house.

What was the outcome?

Will be refinancing the house this month. ARV should be around $320,000 - $350,000.

Lessons learned? Challenges?

Always analyze comparable thoroughly and have a very good estimate for your rehab cost. (I tend to prepare for worst case scenario).

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

As a real estate agent I represented myself.

Investment Info:

Single-family residence other investment.

Purchase price: $230,000
Cash invested: $75,000

My partner and I were able to get this deal with a whole-seller 6 months ago. Both of us are real estate agents and have experience in rehabbing. We combined our team and within a week the rehab was done. The rehab consisted of replacing the roof, changing the floor, doing a new kitchen, updating bathroom vanities, and painting the entire house.

When we purchase the house it was already rented with a good tenant so we rented a hotel room for a week that way we could rehab the house and after we were done they went back home.

Very excited to see how much the house will appraise for. I look forward to announce the great news in the next couple of weeks.

If anyone has experience in mortgage and financing, I would like to know if it is necessary to wait 6 months to do the financing.

Purchase price: $230,000.00

Down payment: $50,000.00

Rehab Cost: $25,000.00

Estimated ARV: $320,000.00 - $350,000.00

What made you interested in investing in this type of deal?

The BRRRR strategy book and podcast.

How did you find this deal and how did you negotiate it?

It was an off market deal through a whole-seller. Comparable were very good and house did not need much repair so we offered full price.

How did you finance this deal?

Hard money lender with 20% down.

How did you add value to the deal?

By rehabbing the following:
Replacing the roof, changing the floor, doing a new kitchen, updating bathroom vanities, and painting the entire house.

What was the outcome?

Will be refinancing the house this month. ARV should be around $320,000 - $350,000.

Lessons learned? Challenges?

Always analyze comparable thoroughly and have a very good estimate for your rehab cost. (I tend to prepare for worst case scenario).

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

As a real estate agent I represented myself.