All Forum Posts by: Dan V.

@Kunal Domakonda Connect with local investors here in BP, attend meetups in your area (some are doing it virtually now), join Facebook real estate groups in your area, mention to everybody you talk to about your real estate investing and ask for referrals. There's also as a website called Nextdoor, it's a neighborhood website, you can ask for recommendations from your neighbors on contractors or on pretty much anything, that's where I found my contractor. Regarding the realtor, I recommend connecting to realtors that are active/member of BP community or find someone that is investor-friendly or investor themselves.

And once you connected to one, it will grow from there. Each person that you will connect with will definitely know somebody that could potentially become part of your team. Good luck!

@Kelly Beasley It seems like you already made up your mind and you just need justification of your decision. 

From an investment standpoint, the numbers are telling me it's not a deal for me. For the rehab, do the work only if it will give you something in return (increase the value or rent), otherwise, don't do it even if you feel like you will "love" it done. Another alternative is to use it as short-term rental, if it's feasible, since you will be leaving on it or next to it anyway. 

From the buyer standpoint, since you have a cash buyer right behind you, be ready for the seller to come back rejecting your request. But anyway, good luck and let us know how it ended up. 

@DeGerrian Evans Are you a flipper, wholesaler, landlord or realtor? Each of these has different ways to set up books and accounting process.

I think as long as they know their market, know what they're doing, and surrounded themselves with a great team, they should be fine. I am also a newbie and started my first flip end of last year. We're in the middle of the project when COVID struck and I was worried about what will happen next. I was constantly talking to my agent but she assured me that our market is hot and inventories remain low. I've also communicated with my contractor to make sure we were doing the best we can to stay on track. We had delays in the permits and some materials so the project took longer than expected and went slightly over budget. But at the same time, when we listed the property, the comps were higher than the ARV I used when I bought the property. On top of that, we got a solid offer over the asking price so was able to recoup the extra costs incurred.

It is still uncertain what the next few months will look like but I am still actively looking for the next project. However, this time, I am more conservative and adjusted my holding period for possible delays when analyzing deals. I think the keyword is "adaptability".

@Account Closed For the first property, the combination of "dedicated" bank account and/or credit card and excel sheet will be a good start. Commingling of funds is usually what starts the mess. Even if your property is under your personal name, it is recommended to have a separate account to use exclusively for your investment property. "Exclusively" does not mean you cannot move money in or out of the account, just don't pay personal expenses from the business account or vice versa. If you will handle your books, having basic accounting background will go a long way, otherwise, don't be afraid to seek for guidance. Congrats on your first investment!

@Gerald Koonce They can assist you on both but they cap it to a certain percentage (LTV) of the ARV. I'm not sure if you can choose to fund just one or you must do both, some HML prefer to do both to make sure you have the funds to complete the project. Your cash to pay at closing depends on the deal you have. Also, they don't give you the rehab funds upfront, you have to show progress first before they give you the draw so you need funding for the initial costs of the rehab.

@Gerald Koonce

@Joe Gee Sub-class will count towards the 40 class limit, unfortunately. The reason I like the main class, sub-class set up is that you can easily see the roll-up of flip & rental by running property by Class. You can make the class for the completed flip few years ago inactive, in case you reached the limit, the historical data will still be there and you can still run the report for inactive class, in case you need to. Bradley's suggestion will also work, it just requires an extra step in the data entry. Anyways, play around those options to find out which one works best for you.

@Rocco Swinney If you are not going to use 100% of the proceeds from the cash out refi, I suggest you deposit the funds to a separate bank account. This will make it easier for you and your accountant to trace the use of funds later on and figure out which interest is deductible and which is not. The tracing rule gets more complicated if you commingle the cash out funds with unborrowed funds. 

Before you buy under an LLC you have to make sure that you will be able to fund the purchase under the LLC. Banks do not usually lend to new entities so initially, you either have to put in your own money to the LLC or borrow from hard money or private lenders. And if you are going to use an LLC, everything should be under the LLC name, and transactions are processed thru the LLC accounts, no commingling.

And yes, as Carl mentioned, the lender may require you to personally guarantee the loan until you have enough history to get you off the hook. 

@Joe Gee Yes, you can do that. If you want to see the rollup numbers for flip & rental, you can create Class for Flip and for Rental then each property as sub-class for whichever main class it belongs to.