All Forum Posts by: Chris R.

Maybe ask the buyers what their required minimum profit is if they don't want to give you a percentage? From what I've read, 65% is pretty standard so whether the property is 1,000 or 1,000,000 the percentage left over for the buyer is the same.

I tell them that I work directly for the owner (an entity that pays me), but I've never been asked specifically about a property management company. In having discussions with people that live in my target area, it seems like the individual owners are worse as they do not have the resources/time to care for the properties (or that is the speculation of the tenant at least).

Wife and I have '96 Civic with broken odometer and '05 Scion tC, both paid for. Looking to get a truck soon - cutting drywall in home depot parking lot so it will fit in Scion is getting a little old :). We also have a baby coming in November so will be looking to get her a 4 door (both are 2 doors).

We are *almost* under contract on an REO and we have an inspection clause in our contract. That being said, the bank is not going to re-negotiate based on the inspection. It is for us to know what to expect after closing and get out if there is a *huge* problem we did not notice in the walk-through. This has been an interesting negotiation with BofA and I can't wait to post the details once it's all signed off on.

This should probably be copied to success stories since it's my first but it is an reo so...
River City Bank - local
3/2 Duplex listed at 29,900
Listed 10/2010
Purchase 12/3/2010 for $26,500 (4 days of back and forth)
Renovations: $8300
Unit 2 (upstairs) rented 1/5/11 $625
Unit 1 rented 2/1/11 $645

I hope this is the right forum. I've seen several threads on structuring a partnership but I can't find anything that addresses the profit split.

The situation is this: I own profitable rental property (thanks to the fantastic advice gathered here) that I manage myself. I do not have the cash to buy more, but now have an investor that can pay all cash for the purchase and rehab of some more properties. He wants to be a 50/50 partner with me and we will set up an LLC for the legal side of it. He will be involved in big picture type decisions mostly (he's not afraid to get in and rehab but has less available time than I do) but I will be the one doing the majority of rehab, managing contractors, finding tenants, managing the books, etc. etc.

We have discussed how to split up the profits but decided to take a break and think on it some more. We are both very fair people and we just want to make sure it is set-up so that the other never feels like they got the short end of the stick. My initial thought was he "loans" the money to the LLC and the loan is paid back from the rent revenue. Then I receive some payment 6-10% of rents (professional property mgmt fees in area are 10% of gross). After any other expenses, profit is split 50/50.

We also discussed doing a refi after 18-24 months so that he gets his cash back out. However, he is hesitant to that and I understand why - I should have some equity by that point.

Please give any advice and/or experience in how you have handled situations like this in the past.

I spoke with the seller. The home was purchased on a lease option and rented out. It's time to exercise the option and the buyer does not have closing costs in cash so now he is selling. He apparently can give up the property but does not want to because of the money he has already put into it.

A local home is being marketed at a very attractive price. In the description is:

Before I get into any conversations with seller or attorney, can someone give insight on what this guy is trying to do?

Thank you!

Thank you all for your responses! My list of questions grows every day and I have certainly been reading every chance that I have.

Rather than continuing to ask questions in this thread, I'll be starting new threads for each question that comes up (If I can't find the answer on my own first).

If anyone is in the Louisville area, I'm buying lunch and/or beers if you'd be willing to sit down with me.

Thanks again, I'm sure you'll be hearing more from me as I get this ball rolling!

Chris

I hope this is posted in the right place.

This is my position last night:
At my very first REIA meeting, not sure what to expect. First of all, it's surprising how friendly people are at this meeting. Several people approached me to introduce themselves, told me how many properties they owned and said that, at my age, I'm doing the best thing possible.

Fast forward a bit. I have a mission to find a seat as close to the front as possible and I manage to get one at the table right in front of the panel (It was an "ask the expert" night). Next to me is a gentleman very far along in his investing career that owns SFH all across the States. Before the meeting starts he asks me where I am in my investing career, advises me that he got to where he is by renting quality homes to quality people, and then the meeting starts.

After the meeting, the same gentleman asks to look over the notes I took! He went over my notes, line by line, and congratulated me on taking good notes. His next question was, "what are you going to do when you leave here tonight"?

After speaking with him for a few minutes, another gentleman at the table told me he buys houses, fixes them up and sells to investors looking to rent. We spoke for 30 minutes about the business.

I gathered more information than I ever imagined (all for only $25!!).

The dilemma is this: both of the gentleman I spoke to asked me if I had any questions. Investors that are successful, in my area, asking if I have any questions. I think all newbies can learn from this: If someone is willing to provide guidance and answer your questions, what do you ask so that you gain the most without wasting their time?