All Forum Posts by: Chris Soignier

Very sad and disturbing.   My thoughts and prayers are with the victims and their loved ones.

Forgot to mention, you'll need to also budget closing costs, operational liquidity, and rehab/escrow if applicable, which together can total well in excess of 25% of the purchase price.

1.   Yes

2.  Flat-out dishonest and unethical unless your rich friend/family member is allowing you to use those funds to close.    Reputations take time to build, but can be destroyed instantaneously.    Don't do it!

3. Maybe that gets you to the closing table, but then what's your exit strategy?    If your interest rate is greater than the cap rate, you're losing money starting on day 1.    Feels like a ticking time bomb to me ex. perhaps as bridge financing when you have a firm permanent financing solution just not quite ready to go.

4. Why not just be honest and state that you're in the process of raising money for it?    $40K (on top of your $30K) s/b easy to find if it's a good, bankable deal.

Is one of the PM companies Wehner MF?   Seriously, they seem to be killing it in the DFW market, and I was impressed w/ the due diligence they performed in short order on a bid I recently made on a 175 unit complex.   I'm likely to hire them when/if I sponsor a deal.

I don't think there's any preferred method.   I did my classes online b/c it was cheap, but all else equal I would have preferred a classroom setting.    Do you have time to attend classes?   Online works well for folks who can't commit to fixed day-long classes, like those w/ FT jobs, parents w/ young kids, etc.

 W/ unsecured credit, no problem.

If your loan is secured by the property, yes as long as you're willing to assume the risk of triggering the due on sale clause that your loan will likely contain.

It sounds like you need a construction loan.    The problem is that you already have a first lien on the property, so a construction lender isn't likely to be thrilled about 2nd position.    Have you thought about asking your current mortgage lender for a construction loan?

BTW, for future reference, you should get financing in place before starting construction!

If you're using GAAP accounting (recommended), you should carry your assets at the lower of cost or market value, and you don't recognize the appreciation until the property is sold.   Additionally, depreciation is recognized against the adjusted cost basis for the property, not the market value.

If you're not going to bother w/ GAAP, I'd still book the assets @ cost, but then add a line item to assets like goodwill or unrecognized appreciation.

@Sipo Thao, thanks for sharing your inspiring story. Looks like you're off to a great start in the REI world!

 Anyone earning a 2% rent ratio s/b able to comfortably afford both.   However, (a) I wouldn't make an investment decision based on any info provided by Zillow; (b) 2% rent ratios are hard to find in Fort Worth, unless perhaps in the ghetto; and (c) high CA income tax rates shouldn't matter much b/c depreciation should minimize taxable income.