All Forum Posts by: Daniel DiCosimo

Thanks for the feedback everyone, I always appreciate seeing lots of feedback on these posts. As I figure things out, some of you wise folks may get a PM as I make my next move. 

Dan

@Ethan McRae

@Nate Marshall

Nate, exactly what Ethan said. The lenders I have talked to won't give money to an LLC without me having a track record or collateral. I think your Series LLC structure is smart and something I plan on doing down the road if I ever figure out how to actually have a deed placed under an LLC. Until I can figure that out, I would just paying to setup all of the LLCs.

Weston, me and my business partner actually tried that route on the first go-around. Maybe it differs by state, but no lawyer in MN would help us with that. In fact, some were insulted at the ask. They didn’t like it because it wasn’t really a legitimate work-around, they called it a more creative way of hiding the deed transfer. I even had a friend in law-school ask one of her professors. They agreed that unless you have credibility to get a loan directly to your business...you’re out of luck.

I know the subject makes me sound dumb, but I'm serious. It's best practice to set up an LLC to protect your personal assets, but from what I've found, it's nearly impossible to get your first property under that LLC without it having any credibility. Banks won't give it a loan and you don't want to run the risk of transferring the title from your personal to the LLC and the lender calling the mortgage due. So even though I have an LLC set up, it has no affiliation with my property since it was a personal loan.

I'm just kind of frustrated that every smart lawyer/investor/business person tells you that setting up an LLC is the wise thing to do, but the system makes is very difficult to accomplish.

I’d appreciate any testimonials. I’m starting the search for the second property and I’d like to do things different this time around.

I am looking at the details on FHA and Home Possible loans. From what I gather, Home Possible beats FHA in regards to the MI premiums dropping after 22% equity is reached. But I am a little confused on the owner occupancy rules for both.

I see a lot of people use FHA, live in the unit for a year, and then move on to the next one. Does anyone know if the same is possible with Home Possible?

Also, do any implications present themselves when you change a property from your primary residence to a investment property under a FHA?

Not going through with it. Thanks everyone!

@Michael Noto I appreciate the warning. Do you have any markets you would recommend I look into? I currently live in Minneapolis and am having a hard time finding a deal locally.

@Dennis M. Looks like it’s still assessed at 46k. Good call, I was not aware I could look that up!

@Josh Dane you make a lot of good points, and I have been thinking a lot about where I should invest. My local market is very expensive, which is leading me to look in the surrounding small town areas to at least get a start, but there is limited inventory in these areas. Out of state looks appealing but a little nerve racking for the first deal.

@Josh Dane you are correct, it is a small town a couple hours from where I live. And good PM has been a concern. I am trying to get a hold of companies in the surrounding areas to see what their services and pricing. Another concern I have is RE-selling in these small communities.

Hello BP community.

I am new to the forums and working on my first deal and would appreciate some feedback on my first deal analysis. Here is the summary:

- 2/1/1/1 4 plex

- Last sold in 2016 for 46,000

- Owner has put in $8332 for rehab since

- list price : 79,900

- last years rent total: $21,446

- last years expenses: $10,912 (this is not counting Safe Harbor expenses, I included those in rehab)

The place is by no means sparkling, some of the units have section 8 tenants, and it’s in a small town with population of around 1300. But is 17 miles from a town of 27,000.

I've run the numbers on my own and cash flow was close to the actuals ($6997 cash flow before taxes, 29.4% cash on cash ROI, cap rate of 13.88%).

My main concern is that I am paying over market value. It is being sold privately by the owner, who came up with the price based on its cash flow. I take zestimates with a grain of salt but it is currently around $56,000. Which somewhat aligns with the 46,000 + rehabs the current owner has done.

Please let me know your thoughts!

Dan