All Forum Posts by: Cole Fisher

The beauty of Real Estate Investing is the fact that we all find ourselves in unique strategies to approach our business.  With that being stated, sometimes it is difficult for us to find exactly what we are looking for in BP, so if there are any forums discussing this topic, please feel free to help guide me to the right forum.

I'm currently reading The Book On Tax Strategies for the Savvy Real Estate Investor. Amanda Han and Matthew MacFarland, awesome work! I'm reading the chapter "Your Legal Entities The Right Way" and I found a strong relation to the example of Andy. I have a static LLC that is not being used correctly.

My QUESTION:

I'm living in a house hack, my first investment property. Purchased with an FHA Loan in August 2017, I am curious to know if I can legally direct my tenants to pay their rent to my LLC although the property is in my name?

If not, what is the best option to place my property under my LLC and how long do I have to wait to do this under the terms of FHA. I've talked with my accountant and my lawyer and they don't seem to know this answer (kind of scary).

Thank you all in advance! 

Great feedback. Thank you, Thomas!

(Background)

Lo and behold... 

I finally committed to my first real estate purchase.  At 25, it was time to move away from home and I bought a neat 2 unit rancher, with an attached in-laws quarter (unit #3).  While I flirted with the idea of house hacking for quite some time, Scott Trench's, "Set for Life" gave me the extra nudge needed to make this dream a reality.  (Plug--Thanks Scott and the BP Family).  As the entrepreneurial journey of my real estate career begins, I am having a blast! I'm enjoying the responsibility and I plan to steer my business from the "slumlord" mentality (that many investors in our area have) to a quality portfolio with quality tenants.  My goal is to provide my tenants with a beautiful place at a premium price, a feat I think is extremely manageable for the neighborhood I am located in.  While this is how I scripted my business plan, I did inherit tenants. 

Queue in the false alarm!

(Problem)

One month later....

This past Tuesday, around 11:30pm, I realize there is a Fire Police vehicle parked at my neighbors house. Followed by one firetruck--two firetrucks--

**Imagine the nosey landlord peaking through his or her blinds (thats me)**

 I calmly watch them as they enter unit #1. My building... my tenants... is everything alright? I get out of bed and go outside to gather intel on the situation.  

"Nothing is wrong." is the response from the fire marshal when I asked about the issue.

I tell them my situation as the landowner, and they proceed to tell me that my tenant called in because there was a weird flicker with there gas stove and the flame was burning orange.  In addition one of the tenants had a headache so they speculated there was a carbon monoxide leak.  Fortunately for everyones health, the unit was tested in every location and there was no leak. I am relieved of any anxiety.  

Now, I keep getting asked who pays for the expense of the fire department. And to be honest, I'm not sure there will be a charge. I'm researching and researching, and I can find no suggestions saying that there will be a charge for the false alarm.  Before I call in to the township, I'm wondering if anyone has information regarding a similar situation? How do you deal with a situation like this? I'm curious to see if anyone has other false alarm stories like this?  I look forward to hearing your responses.

Thanks in advance!

Cole

Thank you all for showing interest and helping me out.  I am going to call a bank that offers Portfolio Funding today.  Just to see what I can stir up.  

His other properties can be seen at MJSPLLC.com  He is specializes in luxury homes and is very proud of his work.  Being in sales and having purchasing experience, why wouldn't he budge to lower his selling price.  If I could lower the cost to 85k and get him to take a 50/50 split on the profit would this be a viable deal?  

Bill,

Your input is greatly appreciated! I did try to nudge him on the number and he wouldn't budge.  Didn't low ball him, just asked him an honest, "How flexible can you be with the selling price." He wouldn't let me know about his price paid with the Sheriffs sale and that kind of throws me off.  I think I'm going to pass this one up based on your feedback.  If I could knock him to $85-90K, I would have a lot more comfort.  Thanks again for your input.  The search continues to find my first deal!

Hi ya'll,

I'm going to ask for some help, but I would like to give out a tip as well.  Maybe you used this technique starting out, maybe not.  

Here is my scenario: I saw a "For Sale by Owner" property in my neighborhood, so I decided to call the number on the sign.  Turns out the gentleman on the other line was a wholesaler and seemed to be very knowledgeable.  This sent off a lightbulb in my head.  Did I just find a mentor?  

Anyhow, this man is a wholesaler/fix and flip investor and has a property that he is about to rehab.  He told me that he is selling the property as is for $97,500 or will rehab the house and list the property for $159,000 which I see value at $149,000.  He stated, he would be willing to mentor/collaborate our ideas on the project and let me use his local resources to rehab the property at a reduced cost if I were to purchase the house at the AS/IS price of $97,500.  His reasoning is that I will go to him for properties in the future and continue to help him grow his business as well as my own.  I'm sure he'll make a little extra money on the back end through this as well.  The house needs carpet/laminate floors, HVAC Unit heat pump, and minor drywall repairs.  Also, a new range, dishwasher and paint.  Estimated rehab costs $20,000.  He bought the house through a Sheriff's sale and has been in the business since 2007.  He told me we would be done the rehab work in 3-4 weeks and have the house on the market within a month.

Here is where I'm stuck. Financing!!! I haven't had time to read Brandon Turner's book, The Book on Investing in Real Estate with No (and Low) Money Down.  I told the owner I would get back to him in 2 days with a Yes/No to give him the go ahead to rehab the house himself or to buy the property as is and work together with him to rehab and flip the house.  I'm looking to obtain financing for both the property and the rehab work.  The banks I called are not portfolio lenders, so any tips would be great.  MY DEADLINE IS FRIDAY.

Should I pursue? Should I Slow Down? I'm 23 and like to get hands-on.  That's my best bet for learning the business.  Let me know what your opinions are! 

Tip:

For beginners: Dive in! Call the number on the For Sale By Owner sign! You may be surprised who will pick up the phone. I'm hoping that I pulled the right straw and now I have a mentor/business partner to help jump start my REI career.

Thank you all in advance!

Michele- Lawn/Snow is going to be a service that will be discounted into the price for my tenants.  Worst Case Scenario, I would be able to do this myself with minimal time.  With the cable, I am trying to put this into my favor.  If I provide cable for 3-units, with the cost of 1-home, I figure I can create cashflow by charging my tenants a discount from the cable company.  Good idea?

Jane- My offer stands at $140,000

Expense:

Mortgage- 648

Mortgage Ins. 83

Home Owners - 185

Property Tax- 268.75

Total=1116.08

Income:

Unit 1- 750

Unit 2- 750

Cable- 180

Garage-75

Total= 1755

Cashflow--->638.92

Sorry my spreadsheet didn't work properly!

Hi all,

Looking to place my first offer on a rental! I'm very ambitious... Maybe too ambitious? Anyways, I'm trying to figure out my numbers and I want to talk this through with some pros in the industry. I ran a basic spreadsheet to try to figure out my expenses vs. my income. This is on a 3-unit, but I am requesting and FHA Loan and will be residing in the 3 residence. The mortgage figure is accurate. My biggest concern would be the figure beside home owners insurance. I'd be ecstatic to hear any advice/encouragement! Critics welcome!

Hi all,

I'm a 23 year old planning to diverse my investment portfolio. Currently I have no experience with real estate investing.  I came to BP to expand my network and gain knowledge about the industry.  

Excited and ambitious to learn from professionals within this community.  Any tips and tricks are more than appreciated.  Thanks for letting me join the BP Network!

Regards,

Cole Fisher---York, PA