All Forum Posts by: David Flores

@Joyce Tavares

Hi Joyce, You seem to love what you do! Thats awesome, was really asking for legal advice on starting a property management firm though. Yes,

i manage my 23 units but I want to expand out to the public, not just my units.

We have a lot of questions about legality and how much power a broker actually has if we went into a partnership with him.

My 23 units will always be managed by me.

We are looking to go public though.

Hi Everyone,

I am an experienced real estate investor with 23 units between solely owned and partnership deals. I have a lot of experience and actually manage all these 23 units. I know multiple handymen, multiple contractors, appliance warehouses, have never missed a rent payment, etc. I have a good system. 

That being said I have the network to get into the property management field. The problem is, I am not a broker and I am not an agent. I know a lawyer who I am very friendly with that wants to sign as the broker for the business. He would get 5-10% of profit for doing so. We still have to hash that out. 

We are at preliminary phases of opening the business but my real partner and I (not the lawyer) are curious about some concerns. So Mr. Lawyer already owns and operates a real estate firm (lets call it Mr Laywers Realty). They sell homes and get rent units, typical realty. They do not have a property management side. What Mr. Lawyer wants to do is make another branch called Mr. Lawyer Property Management and have it as a branch under his company he already owns. 

Now, that is not the route me and my real partner wanted to go. We wanted a separate business stating he is only a minority partner and has no real control of the operations. He would really just be a figure head and partner. Are we able to do something like this?

Besides my question in the last sentence my other questions are as follows: Can a broker at anytime pull out of a company and take his broker license with him, thus giving us a non-legal company in the future? Can we make it so the broker does not have any voting power? And can we make it so we are the owners of the company and not Mr. Lawyer (I am assuming this answer is yes as we can set up a partnership operating agreement)?

Really need legal experts here and not opinions. Thanks BP World!!

Hi BP World!!

Just a little intro, I am a real estate investor with over 24 units. I am really into hiking and the outdoors and I am very interested in purchasing an off the grid cabin that is self sufficient (water well, wood fire stove, and solar powered generator) in Greene county most likely. We plan on using as a short term rental while we are not using it.

My original option was going to try to get seller financing as most banks wont lend on such a property. That being said, I am wondering if anyone knows of unconventional financing options in upstate NY in case a seller doesn’t want to do seller financing.

Thanks BP world! Any advice would be great!

@Greg Mihaylov

No the bank wont agree to something like that. They want money in their pocket. Some care where that money comes from (usually bigger traditional banks) and some don’t care at all (smaller ones usually). Granted the numbers need to work still before they approve it, if you are losing money with the two loans incorporated into the analysis that smaller bank probably wont agree to the deal. U need to have a strong running business for the bank to allow u to take on so much leverage. These smaller banks aren’t stupid, just a little more lenient. The good ones will focus on the health of your running business and proposed future, if that looks strong a lot of these small banks will hop on board. The better your track record the more lending you will be able to secure

@Mo Muigai

It really depends on your area. Some of my properties have an interest rate of 4.8% and others have 5.5-6%. But thats why competition is great! Shop around!

This is a true story! The other day I was at the closing table waiting for our lender to send the CD to finalize everything. The CD was so far delayed that our time slot was up and the title agent had to go to another closing. Well, since we had an hour and half of just waiting around we struck up conversations. One of them being politics. I will not disclose my beliefs as I know that is a very touchy subject these days but needless to say our sights on the government were the same. She felt for us and we told her that we had contractors coming in that day to start rehab work. She gave us her number and after all her appointments we met at a diner to close the property after the CD finally came in. Once it came in we wired the money and closed with her at a local diner. Keys in hand and ready to start the rehab! 

Funny story I thought I would share with the BP community. 

@Nathan Shankles

You have sooo many options! All I can say is what I would do as a serious investor. I don’t know your commitment to this. What I would do is move out of your current home and rent it out. Increase that cash flow! Then i would purchase a home that needs rehab. I would live in that home, rehab, refi, and rent it out. You get your money back and your cash flow goes up more, and in my opinion the most important part you will learn how much things cost and how to do your own repair work. I would keep doing this until my cash flow allows me to quit my job. Because of your equity though you can definitely hunt for other rentals to buy during this journey. The live in rehabs you could leverage on so you are protecting your capital. Have the cash flow and refis pay for your properties. Once you get this snowball going I think you can definitely achieve that 12k goal in 8 years.

@Mark Cios

The seller is still getting paid either 80-75% of the purchase price from the bank. Then on top of this they would be receiving side passive income from the loan payment. People do this for various reasons, tax benefits, releasing themselves from the home and maintenance, assisting with retirement, or just simply to assist doing the sale. Seller financing will never work in areas that are fast turnaround. Seller financing usually works better in areas where places, especially investment properties, will sit for an extended period of time. Reason being is in places with fast turnaround, if today someone offers a creative deal they can almost be sure someone tomorrow will present a traditional deal or even all cash. For example, I live in Jersey, this will never work here. Properties I have in jersey are traditional purchases. My properties in PA and WV though, this is where it can be done.

@William Coet

They will differ in every situation. Ones I have done range from 5-6%

@Mark Cios

You are thinking of seller financing. I have done this with multiple of my investment properties. Not sure what everyone else is referring to, I think those must be traditional banks but I would never recommend working with a traditional bank. Your experience, knowledge, and the deal does not matter to them.

Work with privately owned banks (not your citizens, TDs, chases, etc). You can have the seller pay for your down payment and then you would setup a loan structure with them. To make everything really simple here, you would be carrying to loans. One from the bank and one to the seller. When doing this though you need to have extra high margins. I usually advise people on cap rates above 10% for seller financing deals. Bottom line is make sure you are still cash flowing well when taking all expenses and both loans into consideration.

I run an entire podcast about not just seller financing but other low and no money down strategies. Its called “No Money Down Real Estate Investing” on Itunes and Spotify. It can be a great help to you. DM me if you have any questions.