All Forum Posts by: Colin Fleming

I agree with Dmitriy, you need a written agreement. An attorney and CPA will advise on entity structure (probably LLC) and help you file with your state, get EIN etc.

Partnerships are difficult.  In my 27 years of investing I have had 4 and couldn't wait to get out of each one.  They rarely work as intended for a variety of reasons.  Not trying to be a bummer, just talking from experience.

Maybe consider separate LLC and JV with those? One entity should have controlling interest and expectation of running the deal.

Hi Noel,  The first thing you need to do is figure out how to fund this deal.  You mentioned you would not qualify for any normal bank financing.  Have you been formally denied by a bank?  No use calculating anything unless you have access to funding.

If you get that part in place, I would analyze this as a straight rental to make sure it cash flows when you eventually move out. Assuming you won't have any historic financial info (or accurate info), take the mid range of the rents you gave and times by 65%. This is your estimate of NOI. Divide this by P&I payment only, if it is 1.15:1 or better, I would continue due diligence and work towards a more accurate projection.

If it cash flows using this model, your occupancy cost will be very reasonable if not free.  Just minus out your room, or half the number you used for the 2 bedroom to see what your net housing expense will be.

This is a "first pass" basic screen to see if a property is worth more due diligence.

Good luck!
 

Hi Frank, thank you for serving our country.  Find a neighborhood group in your area (there may be several in a larger metro area) such as Nextdoor etc.  Join and be active for a week or so, making sure to be sincere.  Then post that you are looking for an off market duplex and need your neighbors help.  This has worked for me the two times I tried it.  People are generally willing to help out their neighbors.

Good Luck.  Let me know how it turns out.  

With tax deed auctions, usually you get the property as soon as you pay the amount of your winning bid.  You may be thinking of tax lien auctions where there is usually a redemption period that the homeowner can pay the taxes and satisfy the lien.

100k as a private lender will fund many deals here in the mid-west.  I can help you find real estate investors/borrowers if interested.  You can structure short term deals for purchase and rehab with borrowers that have take out financing from traditional sources (banks etc.)  If you can turn your 100k several times per year you would have a decent yield.

Wisconsin is a tax deed property.  If property taxes are delinquent after a certain time period the county will sell the property, usually for fair market value, unlike tax lien or certificate states that sell a certificate for amount of back due taxes and the buyer gets a lien on the property that is superior to other liens and can be foreclosed after required waiting period.

Are you looking at a certain property with back taxes?  That may make a seller motivated but they would still need to agree to sell to you for agreed upon price.

In FL I believe you can purchase a Tax Lien or Tax Deed.  A Tax Lien is where you pay the delinquent taxes which accrues interest based on state statute.  The property owner has a set amount of time to pay their delinquent taxes (redemption period), if they do not, you can take ownership of the property.

A tax deed is where you buy the property directly from the county and take ownership right away.

Please check specifics for FL.

Either way you are "taking care of the taxes" and would not need to "pay the owner" anything.  Those strategies sound more relevant to a short sale or distressed owner/property sale.

Please make sure you understand the state and county specifics for tax sales before purchasing.  Many of these parcels are worthless properties (drainage ditch, land locked etc.).