All Forum Posts by: Don Owens

@Steve Lehman.  Thank you for the response.  The property is in Greenfield not Indianapolis.  I asked another agent to look into the neighborhood convenance as well to see if they would be an issue with replating.  I also just found out that the property is on well and septic, and the well is on one lot and the sceptic the other.  So this might also complicate matters significantly as I would probably need to add both an additional well and an additional septic in order to truly split these into two separate properties.  Still doing some digging, but if the neighborhood and city will allow it then will take the next step and see if the cost of these additional services would negate the value of splitting the property up or not.

Hi All. I am currently living in Houston, TX and have experience with rental properties and flips in this market, but I am inheriting an older home in Greenfield, Indianapolis.  I am looking for any investors, flippers, and investor friendly agents that are plugged into this specific sub-market of Indianapolis.  The house sits across 2 lots in a golf course neighborhood (~1.75 acers in total).  It is also very dated last updated in the 1980s.  So I think moving the lot lines so the house and 2nd lot can be sold separately or even developed and also doing a moderate level renovation could really increase the value of this property overall.  I am looking for someone that is active in this market and can guide me on how friendly or not the city might be to replating these lots and also some one that I can work with on the renovations.  I have people and crews I have worked with here in Houston and have some experience working with the City of Houston on these types of matters, but I don't have those same connections in Indianapolis.  Thanks in advance for any advice, guidance, or introductions anyone might have in these areas.

All the best,

-Don-

I am looking for an individual or firm with experience setting up syndication structures with a focus on maximizing tax savings benefits for high income LPs that are participating in the fund. The fund would include primarily highly compensated director and C-level executives that are in the upper income tax brackets and are not real-estate professionals. These individuals are looking for a way to participate in more of the tax saving that come from owning property verses just getting a fixed return on hard money that is taxed as income at 30-40% when they get paid. One key question I have is around wether or how bonus deprecation write offs can be leveraged by the LPs in the fund? I would as like to better understand how taxes would be assessed post the sale of properties held by the fund for more than one year. Finally, if the LPs in the fund wanted to make use of the 1039 exchange to defer taxes on gains from the fund is that something I can do for them via the fund itself or does each individual need to do a 1039 based on their individual gains from the fund/LLC? Finally, as far business entity structure is concerned, where tax efficiency for the LPs is one of the key selling points, is there an advantage or preference for LLC, verse S-corp, verse C-corp? Thank you in advance for any recommendations or connections anyone can share that have experience in these areas.

@Julio Gonzalez. Thank you for the example and feedback to the questions above. I have a few follow-up questions as well. I have raised a syndication fund recently and will be purchasing several SFH as part of that fund. The plan is to purchase, rehab, rent out and stabilize those properties and then in 3-5 years sell them as turnkey properties. The rent during the intervening years and the proceeds of the sales will then be distributed to the LPs and GP (myself) based on agreed waterfall percentages establish in the operating agreement of the LLC for this fund. None of the LPs in the fund are real-estate professional and they are all highly compensated director and C-level executives that are in the upper tax brackets from an income perspective. I have done hard money fixed interest types of funds in the past, but these individuals are looking for a way to participate in more of the tax saving that comes from owning property verses just getting a fixed return that is taxed as income at 30-40% when they get paid. So if I run a cost segregation study to do bonus deprecation would they be able to make use of those write offs in the early years of this fund? Since the properties will be owned longer than one year will the sale be taxed as capital gains or income when they receive distributions from the LLC? If they wanted to make use of the 1039 exchange to again avoid taxes is that something I can do for them via the LLC or does each individual need to do a 1039 based on their individual gains from the LLC? Finally, for as far business entity structure is concerned, where tax efficiency for the LPs is one of the key selling points, is there an advantage or preference for LLC, verse S-corp, verse C-corp? Sorry for the barrage of questions but just looking for some guidance as I move away from my previous experience doing simple hard money into more of this LP/GP equity arrangement.

Hi Matthew.  I already own some rental properties in the Midwest and moving to the Katy, TX area fulltime for work in a couple of weeks.  I am looking for some good local REIAs/Meetups to join.  Can you point me in the right direction to sign up for your Meetup or any other Houston meetups you would recommend.  Thanks!

-Don-

Thanks @Cody Duff for the advice and information and I just sent a request in to join the facebook group.  

All the best,

-Don-

Hi @Cody Duff. I was just writing to see if you there is any plan to try a Zoom meet-up in the future for the Ohio Valley Real Estate Club. I am a rental property investor in Evansville along with my brother who currently lives in Evansville. I would of course love to attend one of the meet-ups in person, but since I am currently living overseas that is not feasible. I know that many of the different meet-up groups in the US have recently started trying out virtual meetings due to the lockdown and if there is any possibility to have one of the meet-ups virtually it might be a good way to connect with additional investors like myself that aren't able to attend in person for a variety of reasons.  Just a thought and please do let me know if you think this might be an option in the future.  Thanks!

All the best,

-Don-

Hi Andrew,

Thanks for the response and a lot of what you mentioned lines up with my experience thus far reaching out to some of the banks in the few cases where I have actually been able to get a human on the phone.  I guess my hope was to see if anyone out there had heard of banks becoming more open to conducting loan services virtually/online especially in light of the Covid situation.  I would still be interested to know if any one is aware of any companies out there that are trying to do for commercial loans what Rocket mortgage is doing for primary home loans.  I don't have an urgent need to obtain the loans, but longer-term I am trying to see what options there are for me to obtain commercial loans while living overseas so I can add some leverage into the portfolio.  Otherwise I am just stuck as I am right now buying everything for cash as I have been.  As for the home value yes I know this is a challenge but I also know that in some markets this is more common.  I am aware of many people getting loans in this range in Indiana for rental properties, but usually through small local banks where they already have an established relationship.  I am also looking into trying to partner or work via family members as well to overcome this hurdle but this also brings its own set of challenges and complications.  Thanks again though for the advice and feedback and if anyone is aware of any companies doing commercial loan origination via an online model I would love to hear about it!  Thanks.

All the best,

-Don-

Hello BP community, 

I have a somewhat unique situation and wanted to see if any one had any experience or could offer advice on how to approach my particular situation.  For the last 3+ years I have been living and working overseas in the Middle East.  This expat assignment has given me an excellent opportunity to earn and save money and I have begun looking at ways to better deploy that capital beyond just the stock market.  Last year I purchased a couple of single family homes in the Mid-west for around $100k in total for both.  I paid cash for both and I have fantastic property manager in place and the homes are rented and providing a good return.  What I would like to do now is obtain commercial loan(s) on those properties so that I can free up some capital to purchase additional properties.  The issue I am having though is I can not find any leaders to work with remotely.  I was hoping that especially with what is occurring globally with the Covid-19 lockdowns and social distancing that banks would start becoming more comfortable with doing virtual loan processing, but so far I have not had any luck.  I also unfortunately did not have an already established relationship with any small banks before I moved overseas to fall back on and all my accounts are with one of the major banks in US, which could careless about tiny single family rental property loans.  Finally, I only make it back to the US for about 10 days out of the year around Christmas time and most of that time the banks are closed and I don't have the time to take 2 days away from family to fly down to where the investment properties are located.  So long story short does anyone have any advice or guidance on how to approach a situation like that?  Are there any forward thinking banks getting into this space?  I tried rocket mortgage but they seem to only want to deal with primary residence mortgages and not rental properties.  Thanks in advance for any help or advice especially if anyone has had success obtaining mortgages remotely from abroad and can share how they did it.

We are looking at purchasing our 2nd rental property and our agent shared a good condition 2 bed 1 bath 1940s construction in nice neighborhood.  The asking is $39,900 and we expect to be able to rent at $600/month.  During walk through my brother discovered that the entire outside of home is covered with Asbestos siding.  Also on the front porch there is some small damage to some of the siding.  So wanted to see if anyone had experience with this and if this is a big issue or if we are making a mountain out of a mole hill.  Our PM team said they usually don’t deal with Asbestos and if found would try to leave it untouched or simply paint it but not remove. So does anyone have experience with this issue?  Can it just be repainted and left in place or will we likely need to replace?  Any ideas for cost to entirely remove asbestos siding and replace with new?  I am estimating 1000 sq ft of external siding.  Should we just pass on this one and keep looking for the next opportunity? Thanks for any advice or experiences anyone can’t share on this topic.

All the best,

-Don-