All Forum Posts by: David Vile

If your partner owns more than 50% of both LLC A and LLC B, and the property has an unrealized loss, a sale between the partnerships can get a little tricky from a tax perspective.

Regardless of the previous sentence, there may be a planning opportunity here depending on whether the property has unrealized gain or unrealized loss. You'll want to make sure your CPA is aware of what you're doing and can give you feedback regarding getting the real estate asset from LLC B to LLC A in a tax advantageous manner.

Thank you for the quick response! I wasn’t getting the warm and fuzzies when I started breaking the deal down.

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Myself and a partner are in an LLC together, we'll call this "A LLC" . He is a member of another LLC , we'll call this "B LLC" with two people. They want to dissolve the "B LLC" but they have one property still. The question is, is it legal for our "A LLC" to purchase the property from the other "B LLC"? If one member is a member of both of those companies?

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I'm finishing up my first flip with a partner; as him and I discuss future plans for another flip then eventually rentals, I want to know what more I can be learning that will help me/us moving forward with our goals. Which brings me to my question for seasoned investors out there.

If you had the ability to go to college for free to learn something that will translate to your real estate business, which avenue would you choose? What would be the pro's, cons?

I'm currently using the Post 9/11 GI Bill to receive free schooling, I'll finish my bachelor's in Project Management in two months and I'll have ~13 months left to continue going to school. I am considering looking into a Masters in Accounting, or an MBA. I also started looking into using the GI Bill to get my real estate license, and looked at technical trades as well, such as electrical, carpentry etc. I asked a few acquintances and some of them seem to think the Accounting degree might not be all that helpful when looking in the future as a real estate investor. To be honest, receiving the actual degree isn't really important, the learning from the classes is what I'm most interested in, but with the GI Bill I have to choose a degree of study. I work full-time in a non-related reeal estate gig, and have been doing the real estate part-time, so the school is also part/full time.

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Originally posted by @Shawn Ward:

@David Vile I use:

1. Excel calendar that we and our Sub sign off on

2. Whiteboard at each flip a a reminder to the Sub and the workers

See attached example of both.

All the best!

sjw

Thank you. That is exactly something I was looking and thinking about. Appreciate the insight.

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I was curious what everyone uses to plan their rehab? I like to think I'm a pretty organized person and don't know if a Gant chart would be ideal, or maybe a calendar and block off the work etc. I'm curious as to what the more experienced rehabbers do? I'm getting into a rehab with my partner and I want to be able to look at something and update it as we go to see the visual progress. You know aside from seeing the completion of each part of the rehab at the property.

Thanks guys!

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Originally posted by @Andrew Johnson:

@David Vile It's always tricky and fun to try to figure out why a property has been sitting at a seemingly fair (or lean) price. Odds are there's a reason. A good reason. It's just a matter of finding out what that reason is. I wouldn't worry about a hot water heater, those are (relatively) cheap fixes. It's the HVAC that will get you. When you start doing repairs you're talking $1K+ if it's more than just a routine service/cleaning/charging.

In a 90 year old house I'd be really concerned about the plumbing, potential for galvanized pipes, etc. That's a huge expense if things are going sideways on that end of things. And roofs are always a little bit hit-and-miss. A "new roof" is great and will last 20+ years but there are plenty of people that just take shortcuts and put a new layer of asphalt shingles on top of the old ones to save time and money. So you just have to know what you're actually getting when someone says "new roof" or "roof that's 8 years old".

Yeah, I looked at the property without my brother. I called him and talked to him, he mentioned the plumbing too (he thought of it as he’s the HVAC technician) I didn’t even think of it. I think i need to do more research before I pull the trigger on anything. I may be trying to dive head first into this too quickly. That’s some good information to think about though.

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Originally posted by @Lana Lee:

Originally posted by @David Vile:

Hi guys, first time posting here. My brother and I are looking into buying duplexes in the suburbs around Philadelphia and New Jersey since that is where we grew up and currently live. I found a few duplexes that I feel I've ran the numbers including maintenance, vacancy etc and these properties should generate ~$200-300 cash flow a month once fully rented out. We plan on getting a few properties and generate the cash flow and leave it until we have enough for another property. We'll be putting 15% down and using a conventional loan at 30yrs fixed.

I found these through real estate agents and looking online. I feel like I'm missing something though, these properties have been sitting online for months according to the websites. Can anybody give me an idea on something I may be missing or over looking as these seem maybe a little too good to be true? I appreciate the input guys.

You mentioned that it was sitting on the market for a long time. In my experience, good multifamily is gone in a couple of days days if not hours. How close were you watching the property. Did it go pending and back on the market in some point ? Did you check the zoning? Is it a legal duplex?

It is a legal duplex. I didn’t notice it pending at all. Pretty much just sitting for sale the whole time I’ve been looking for a property, which is about a month.

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Originally posted by @Andrew Johnson:

@David Vile I think your numbers are coming up nice because you’re using 5% instead of 8% for vacancy. 5% instead of 10% for cap-ex. So while your rents are conservative your expenses are conservative as well. Now that might be logical if you’re buying 2015 construction but not so much if it was built in the 1960s. I’m assuming property taxes and in there somewhere but I didn’t see them. Anyway, the net result is that you might be “shading” the expenses slightly slow. It happens all of the time. But if you change everything from 5% to 8% it will add up.

My suggestion is to stress test your deals but running multiple pro-formats with 5% categories vs. 8% vs. 10%. At least know where that “breaking point” is in your analysis.

That's a good point. The house I'm looking at is 90 years old. I did get a chance to speak with the owner and he said the roof if 8 years old and the hot water heater is about 10 years old. Other than that the property looked like it was in great shape for being so old. I'll run different numbers and see how it still holds up. Property taxes and mortgage are in there. I appreciate the feedback.

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Originally posted by @Andrew Johnson:

David Vile Run your numbers in the BP deal analyzer and post the results. It’s hard to know what you might be missing if you’re not denoting the categories, values used, etc.

For expenses I ran - Vacancy 5%, Capex 5%, Garbage 5%, Repairs 5%, Water & sewer $80 monthly, Insurance $80 monthly.

I used conservative rents for the area, for the 1 BR I used $800 a month; I believe we could realistically get $850-950 for the 1BR, and the 2 BR I used $950; but other 2BR's in the area are going for 1300-1400. With the conservative rents I'm looking at an income of $1750 with a monthly cashflow of $303. 64. Cash on Cash ROI is 14.01%.

I tried to drop the PDF file in this reply. Can I not share files on here?

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delete

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All Forum Posts by: David Vile

David Vile has started 4 posts and replied 11 times.

Post: Purchasing a house from a partner's other LLC

Post: Purchasing a house from a partner's other LLC

Post: College education to help with real estate

Post: What tools do you use to track the progress through a rehab?

Post: What tools do you use to track the progress through a rehab?

Post: Newbie investor, Am I doing this right?

Post: Newbie investor, Am I doing this right?

Post: Newbie investor, Am I doing this right?

Post: Newbie investor, Am I doing this right?

Post: Newbie investor, Am I doing this right?