All Forum Posts by: Darrell Wallace

@Natalie Kolodij. Has there been any mention of a lessening the 750 hour threshold for qualification as Real Estate Professional? This was the first year we (my wife) were planning on qualifying for that, with the hopes of writing off some of the REI losses against my active income. However, with the quarantine lasting a month or more, it seems like it will be much harder for her to have enough active participation hours documented to be able to qualify.

https://www.cnn.com/2020/03/27/investing/tax-bill-real-estate/index.html

I ran across an article (I think it was CNN) that made reference to some change to the tax code that was included in this new stimulus bill. Something about a change to depreciation limits. The article framed it as a tax break for the 1%. It wasn’t clear if it was referring to the passive loss rule or something else. Does anyone know about this? Looking for the real scoop?

Originally posted by @Fidelis O.:

@Darrell Wallace

Another Physician here. Did you look into physician loans? Most of these are portfolio loans and do not count against Fannie/Freddie limits. Not sure if they will finance construction but you never know until you ask. If you want a list of physician loan lenders that finance multifamily deals let me know 

Sure, that would be great!  Can you PM me the physician loan lender contacts that you have in mind?  Thanks.

Originally posted by @Joel Lopez:

@Darrell Wallace How long is your construction time frame? I have an excellent lender but again I dont think a traditional lender would do this. It seems like hard money is your best bet if you can qualify for a regular loan after I don’t see why not. But then again your timeline is very important. I’m sure their are hml for 9 month periods.

 The construction of the duplex will be about 3 months. Yeah, I was thinking about hard money lenders.  I've never used a hard money lender.  Do they just essentially provide all money up front (minus your contribution) and they have a first lien against it, just like a mortgage company would?  And then when the project is completed, use a commercial lender to put a new mortgage over the whole thing, paying off the hard money lender?  Do the commercial lenders require any seasoning period after construction is complete and tenants are in placed before doing this?

Here is my situation.  I invest in rental homes mostly.  I have exhausted my 10 FannieMae/FreddieMac loans at this point with both single family rentals and a duplex.  I am a physician with excellent personal credit, so qualifying for loans up to this point hasn't been a problem.  We have a couple LLC's set up that we use for our rental properties.  We are considering partnering with a local (Houston, Texas) builder to construct a duplex now, and then afterwards a triplex.  The builder/developer currently owns the land.  What I need is a lender to provide construction loan for the construction of the duplex, and then upon completion of the duplex, to roll it into a mortgage.  Then I will want to repeat for the triplex.  I have reached out to multiple lenders that I know and keep getting the response that they don't handle those types of loans.  I think I must be looking in the wrong places.

Can I get some advice?

Thanks!

I am an investor looking for local BRRRR deals, but they have been hard to find since I have a busy full-time job in another industry. As a result, I decided to partner with a local agent/investor, who brought a deal to the table due to her network. We are 50/50 partners in our LLC and both contributed cash to the purchase of a SFH rental, which was attained below market value due to a distressed seller. The initial purchase was all cash, and it is rehabbed and now rented with a 3 year lease in place.

Based on our partnership agreement, since she brought the deal to the table due to her network, she will get all of her investment capital out first at refinance, and if there remains any invested capital left in the deal, it will be mine.  We will subsequently split the cash flow 50/50 each month, and if/when we decide to sell it, the profit from the sale will first go to allow me to get my remaining invested capital back, and then we would split 50/50 the profit after that.

So, I have 2 questions -

1. Is this a fairly typical arrangement for partnerships?

2. When I refinance, my partner (the seasoned agent/investor) said I should try and find a local lender that will allow me to cash-out refinance it with a Fannie Mae/Freddy Mac loan under my name, which would provide the lowest rate and highest leverage.  My partner is already maxed out on those loans, but I am not yet.  My question is- will I be able to finance it just under my name, but have her name listed on the title in addition to mine? 

My original assumption was that since we bought it together in cash through our LLC, we would need need to cashout refinance it in the name of our LLC so we would both have legal tie to the property through our LLC. However, my partner said I should be able to cash-out refi it just under my personal name (to get the good loan terms), and we can put both our names on the title.

Is that possible?  How is that done?  Any local lender recommendations that can do that?