All Forum Posts by: Cory Brown

Hey there,

When forecasting a return for a corporate investment structure, do you subtract state and federal taxes from your ROI calculations?
*** I ask as it doesn't seem that the BP deal calculators factor in state and federal taxes. It only seems to account for municipal which reduces net income before the feds come for their share. ***

For example, if my R/E investments generate $100,000 in net income (held in a corporation) and these profits will be distributed to investors, do you subtract state and federal taxes to find the ROI and IRR?

Corporation net income:$100,000

State/Federal taxes (20%): $20,000

True Net Income: $80,000

What calculations do you use?

@Greg Dickerson, Thanks Greg!

@Roni Elias, i just reread your response here. Thanks for this!

@Hai Loc Hey there, thanks for your note.

I’m out on the West Coast. I’ll take a look into Meridian.

Hey BP,

Does anyone know of or point me towards Canadian long term lenders for multi-family acquisitions?

In addition can anyone weigh in on the terms they lend on like LTV, down payment requirements, etc?

Thanks - C

Is anyone concerned about house hacking techniques that could give you liability exposure with your insurance provider?

For example, with some policies short term rentals can get your coverage cancelled or worse, not in force if there is a claim. Another example would be renting additional parking spots... theoretically, it is possible the insurer could say they won’t cover you if you have a claim as you were commercially profiting while only covered by a residential policy.

So, how do you get around this or get the right insurance coverage with out blowing your cash flow?

Hey all!

Does anyone have a financial template that would model out the finances of property purchased through a partnership? I’m sure it varies for every deal, but a starting point would be great.

Some of the assumptions/questions I’m looking to answer are (in no particular order):

1. What is a suggested % ownership structure between the GP and LPs?

2. Should the LPs get a preferred interest or payout - about how much?

3. As a percentage of revenue, how much is reasonable for a GP management fee?

4. How much of a contingency should be kept on hand (% rule of thumb)

5. In case of an unexpected expense and a required cash infusion from the partners, any thoughts on how that is handled best?

Cheers - CB

@Tyler Speelman - How about being supportive of them? I do this with my tenants.

In short, the agreement on my leases are that if they break early, I need to find a suitable tenant at my discretion to fill the unit. I also ask them to help. If I can’t, they pay until I do. If it were the end of the lease, I’d have to do it anyway.

A benefit of this is that it helps reduce the potential for vindictive actions or just the extra cleaning because they felt hard done by.

The way I see it, there is the letter of the law (or lease) and the spirit of it. The spirit of it is to ensure that they don’t leave you hamstrung and you don’t hold them back from living there life to the fullest. In other words, I like to support people who have supported me in my real estate pursuits.

The caveat to this is that if they are jerks about it - then stick it to them. Otherwise, be kind.

@Erin Wicomb This really is a remarkable deal! Well done.

I am wondering if you can share or point me in the direction of where I can find info on how you structure your deals with partners. For example, how you equity split, terms of investment, debt coverage and so on.

Otherwise, congrats again!

@John K. I am going to double down on your comments here.

I have a very basic MacBook Pro that is still running strong after 10 years! I replaced the battery twice, but I also use it everyday and like John, I’ve had ZERO issues.

It has traveled the world with me and has the scars to show it. It is my battle axe that deserves a Vikings funeral when it finally dies.

My recommendation is go with the most basic Mac you can. I’m not a fan of the new gadgets they have like that Touch Bar... just keep it simple and forget about virus updates interrupting your day.