All Forum Posts by: Michael Dombrowski

Thanks for the response Nathan and Bill. Interesting. I have fixed both of their credit histories by making sure all bad debt is paid off as I foresaw the opportunity of real estate in our future.

Interesting thoughts. Right now I cant purchase anything because my fianace and I are in the market to buy a new home when her condo sells. So I dont want to ruin my score to buy investment property just yet. I will when her and I are done purchasing a home.

I think the only option here is to buy the property in case of see if my mother can obtain a loan privately. She is sitting on about 400K right now with another 300K in property that is all paid in full. Thoughts on that?

Thanks for the reply Bill. I am just covering my butt as my mother and sister need clear communication on how the money will be split and when. They will also need to keep in mind that they may owe money at the end of the year.(Probably not)

You are referring to accounting principles. I never learned anything about how money is to be divided up among-st partners. But I guess you are correct to think of it as a retained earning statement. What we learn about in college is earning being distributed to share holders. Never even thought of myself or family becoming shareholders of an LLC. I am more worried about the in fighting as my mother and sister are not use to operating a business. You should see all the trouble I had with my mother just wasting all of her rental property income on whatever. She had no savings or budget. 7 months later and she is finally starting to change her ways for the better.

I will be honest, I am allowing them to be in the LLC as my mother and sister have no business back ground. They both have a GED level education with no college and don't care to learn much of anything. Their credit history is bad, but they are on the right track with repairing it. They just need time for past issues to fall off their credit report. Knowing that my mother and sister are in a world of trouble if I dont figure out how to use my brains that will benefit them in the long run. I have to make sure my mother makes all the correct moves now to ensure my sister will have a semi comfortable retirement and not worry about money. I don't have to worry as my education allows me to have a decent job and my fiance is moving up quickly at North Western Mutual. She is also an accountant.

My grandmother and great uncle left my mother with a boat load of money that is burning a hole in her pocket. She understands the need to invest, but doesn't want to put any effort into learning how to invest in the stock market. Doesnt want to put in any work on anything rental property related other than yard work and maintenance which i would help with anyways.

Thanks for the reply.

I am actually an accountant in the restaurant industry.(One of the larger franchises) I can use my moderate/advanced business knowledge on how to operate lean, how to operate on a budget, return, cash is king, etc..... when it comes to Rental properties.

I manage cash flow for the company I work for and it is fun. I have watched it grow to a point where we have too much cash and have refreshed all of our stores.

I manage my mothers and sisters budget and it has worked wonders for their IRA and 403B's.

I also have a finance degree which can be put to use with investing principles.

The only thing I do not have experience in is forming an LLC or mortgage interest rates. This is why I ask.

Hello,

My mother, sister and I plan on starting a real estate investment property. However, we are clueless as how to separate out ownership.

Does anyone have tips and specific guidelines on how to separate out ownership?

Of course % of ownership is determined by capital infused into the LLC.
What about intangible properties. I.E. my willingness to handle all financial decisions, coordinate rental unit fixes, leases, etc.... What is that typically worth to people who have no interest handling the financial aspect of ownership?

Does anyone have a general guideline that they follow when forming an LLC? Does each individual property we pick up change on ownership based on who put in what? How does that work?

What is the general rule of thumb when it comes to releasing money to LLC owners based on ownership? Monthly, yearly?

Typical rule of thumb to build up a cash reserve? Again, is this based on an agreed checking account limit of 10K? If I own 30%, my sister owns 30 % and my mother owns 40%

I would be responsible for adding in 3K
Sister would be responsible for 3K
Mom would be responsible for 4K?

Is their a link to a more specific guideline to follow for LLC rental properties?

Also, can someone explain the investment properties that can be purchased as an owner vs commercial property owner? This affects mortgage interest rates. Can someone explain that? We currently own one rental property that is paid in full and was inherited ten years ago. We feel like we understand how to operate a successful rental unit as we have had no turn over. We are ready for the next step and ready to add to our portfolio.

What is the best method/strategy when it comes to financing with no mortgage in my mothers, sister, and myself's name. I.E., none of us has ever had a mortgage due to living with grandmother/uncle/ renting my entire life. Same can be said for my mother and sister.

Hello all,

My name is Michael and I would like to own a REI within two years.

What are some of the trick successful people as yourself seek when looking for cash flow positive properties? It is all in the negotiating? When I view current prices of potential properties I would like to buy, I dont see how I could be cash flow positive unless I could negotiate a deal. Is their an easier way to locate properties that are cash flow positive that are foreclosures?

Can I have some beginner tips? Please make note that my mother currently inherited a 4 family rental unit 10 years ago from my grandma and great uncle. So in helping her, I have seen some of the head aches that can occur while operating a business. She was lucky to inherit without a mortgage.

Hello,

Not sure if this belongs in this section in this forum, but here goes a shot. A few buddies and I have been inquiring with banks about how to obtain money to form an LLC to buy and hold properties long term.

How can we do this? I know that going into business with friends usually ends bad, but can anyone share their experiences with me? Good and bad are welcome. The reason why I am remotely interested in going in and forming a business and risk friendship is because I believe these guys have the same desire to invest. My background is in finance and accounting. I am currently a staff accountant who is learning every day on how to run on a budget and build cash flow within a small successful restaurant in the milwaukee area.. My partners(which would be two to three partners; four including me) are in the trades. They have sheet metal, electrical, and plumbing experience. All are handy at carpentry. I dont see why this couldn't work as long as all details about how income will be split and how expenses will be split.

Does anyone have suggestions as to how we would collect money and split it? Form an LLC bank account and just pay out at the end of the year or could we do it monthly as long as we are cash flow positive after bills?

How can we obtain this type of lending? Private lenders? Does anyone know of one in Milwaukee?