All Forum Posts by: Donald S.

hey @Jason Luongo I will note, even if you're the best marketer in the world, there will be time when at least one unit is vacant eventually, time between 1 moving out and another moving in, turnover costs, marketing cost for the new unit, so you'll want some set aside for that. Also I would still budget for repairs even if it is new. people can break new things, just as well as old things. plus there's no guarantee that the builder used the best material. always good to have some saved. As for PM, unless you plan to PM yourself until you sell the place, you want to run the numbers with PM in place, otherwise if you do decide to get a PM you may not be able to afford it.

That's good to hear Bianca. Why did you give it to your friend or was that always the plan? Glad to see it worked out, I'm planning on getting into sub2 soon. 

Mind sharing specifics? How much did your friend give the seller, did he assume or sub2, payments? 

those are all red flags. I would run away as fast as possible. Biggest thing to me us a 3 day inspection period? You won't even have time to get the inspection done. And requiring that both parties agree in order to release your earnest money back? No. 

On top of that, any company that operates out of Utah I would avoid. Utah is notorious for their lax laws on fraud, scams are big business there. The company can do the absolute barest minimum job and avoid being sued. 

so @Gareth Fisher why are you on BP if by your own definition everything here, including the BP podcasts and books, are just branding and marketing tools designed to get exposure for those in the company and get them access to capital? 

So my friends I know that have a handful of properties and make good consistent cash flow, they're a fluke? They're just lucky? Oh or are they the ones that "cut corner on the contracting side in the sake of the almighty buck"? 

Obviously you've been burned, and that is unfortunate, but I am of the belief we make our own fortune and luck in this world. Good luck out there, sounds like you need to reevaluate why you're in real estate at all. 

just putting it out there, 

1. if you don't plan to occupy (although it sounds like you do) plan on 25% down for MFR.

2. Have you considered investing in a less "hot" area? 

 So are you thinking of paying them 30k and then taking the property sub 2 the 95k mortgage? If so, do you plan on keeping it as a rental or flipping the house? If you plan on flipping, you'll need a better estimate of value, 30k spread is pretty big at 120 to 150k. 

If you'd keep it to rent you need to run the analysis of buy and hold and roi with that. I'd need more information to give definitive feedback. 

in this order

What is your turnover ratio per year? 

Average stay? 

Total unit's under management? 

How many units did you turn over last year? 

Asking in this order verifys their answers. 

Thanks guys, I thought I mentioned it is in Bevo. Mackal i can't believe i didn't math that out 1st. Of course I should evaluate wheter a conversion is worth it after having a contractor bid it out for me. Duh. I'm dumb. 

Hi @Chris Madrigal, if you're planning on getting a conventional Fannie/freddie conforming loan you won't be able to buy it inside an LLC, Fannie & freddie require a "natural person" purchase the property. You could however write up a partnership agreement and make sure you have good liability umbrella insurance, it should protect you well enough unless you have over 1-5 million in assets. People get a little hung up over holding their 1st property in an LLC.

As for using an investors money for the down payment, this again can't be done if it's a Fannie/Freddie loan, unless the money has sat in your bank account for over 2 months so it doesn't show on the 2 months bank statements that will be required. Any large $$ amount on those statements out of the norm need to be explained. However you could put him on the loan, then he can contribute as much of the DP as you want him to, but the 2 of you together would have to qualify for the loan. If you're doing a BRRRR then once the repairs are done and you go to refi, as long as the house appraises for what you need, you should have no problem getting the refi in your name only and then paying your friend off. I would make sure the partnership agreement included a provision that the refi repay's his DP (plus interest) before you're allowed to walk away with any.

Now if the initial purchase is being done with HML, they generally like an LLC to be the one buying, so having the LLC with your buddy would make sense. HML's won't care where the DP comes from, it could come from God for all they care, as long as they know they're getting their money. Then when you go to refi you'd either have to get a commercial or portfolio loan to keep the property in the LLC, or quitclaim it to your personal names to refi with a bank for a conventional loan.

Good luck, 

Cheers!

You probably have at least 2 options I can think of without getting really creative.

1. you can use hard money to buy all of them, structuring the loan so you can refi out 1 house at a time. 

2. you can contact a commercial lender and try to do a blanket commercial loan that covers all 4. It might have to be with a small local bank instead of a big bank, but I prefer to work with local banks anyway. 

other than that you can always try to raise Private money, seller finance/carryback (doesn't sound like an option), partner with an equity partner, or some combo. 

Good luck

Cheers!