All Forum Posts by: Emil Pinlac

@Katie L.

Hi Katie! Yes. I fully intend to lay out the expectations and multiple exits in the event these types of things don't work out. It's just as beneficial for them, as it is for me to draw up - we're both auditors by trade, so mitigating/reducing risk as well as proper documentation is what we live on. haha. 

There's a lot I am still very unfamiliar with, with regard to the LLC entity so that will be something I will need to do my own research and due diligence on. The annual tax to is definitely an added cost to consider to bake into the numbers of potential deals we might be looking at. Thanks for all your considerations on this.

@DJ Dawson

oof, that's another $800 a year/$67ish extra a month to budget for. 

I will definitely be educating myself beforehand but also consulting with a business attorney before everything is set in stone. I intend on crafting a solid contract agreement with my partner so that there'd be no confusion, and I also want to make sure to reduce our risk as much as possible. 

@Evan Polaski

Hey man, thanks for your response and for all the considerations at the point at which we would draft our partnership agreement. 

But - like you said off the top - if FHA/any owner occupant financing will not let you take title in the LLC, does this mean I cannot use that type of loan at all, if I am intending to purchase it using the LLC?

@Aaron W.

Hey AJ - 

Thanks for your response, man. Yes, I will definitely consult with a real estate attorney/small business expert attorney with regard to drafting a strong contract agreement and my potential partner - in the eventuality that we get our financials set up and we are ready to take that next step. 

However, I wanted to ask specifically then about your own experience with partnerships. How did you get started when you began to structure your partnership deals with partners? Do you have them set up as a 50/50 split all the way through? When you guys have to pay for repairs/maintenance expenses, how did you guys make sure to get maximize those as write-offs? 

Hey @Paul Sedillo

I very much appreciate you laying this all out for me! There's a lot here to unpack - 

1) You bring up the difference between a General Contractor and a Handyman. Would you be able to provide some examples of specific jobs/projects a handyman could handle, vs. hiring a full-on GC? (or, alternatively, SHOULD you hire a handyman for anything in the first place? if they don't have insurance?)

2) Yes! I definitely made a mental note to myself not to just go with whoever's the cheapest. My intent is to establish a long-time working relationship with the professionals I run into, and so I would ideally communicate that I would like to use them over the long-term and I would definitely do my due diligence and ask for references / ask them for pictures of recently completed projects. (hopefully they are GCs that work with investor-clients, not just "building my forever home" type clients.

4) Will I need to create the contract between the GC and myself? Or will they have their own contract provided, and we can just revise/remove things as necessary? 

4a) What is the recommended payment schedule for a project? I heard 50% upfront, and then 25 / 25 afterwards. 

5) I would rather avoid that extra uplift charge - would it be possible for the GC to specifically just tell me what materials they would need for the job, so that I can purchase it myself, and leave it for them in my property? 


Again, I'm completely grateful for your insight and for this quick list of things to consider/know about this process. This was exactly what I needed. 

@Greg Dickerson

Definitely. I want to make the process work as smoothly for all parties involved - including general contractors in the eventuality that I hire them out to work on my units. I do not want to waste anyone's time.

As an aspiring rental property investor, I'm learning that there are very specific updates that I would like to make on my properties, which are intended to keep my tenants safe, and also provide the biggest ROI in terms of forced appreciation and durability to the property. So I'm looking at updates like LVP flooring, reglazing bathtubs, painting kitchen cabinets, replacing old door handles/hardware, scraping popcorn ceilings, and creating cost-efficient landscaping. Would laying these kinds of items out to a potential GC be enough to inform them of what I would want done?

Additionally, will I need to ask every potential GC I hire if they warranty their work? Or is it common industry procedure that every GC will automatically place a warranty on their work? 

Thank you so much for your initial response Greg! I look forward to hearing more from you. 

I recently spent some time catching up with an old friend via Zoom on our various business endeavors and how our careers since college have been going.

I told him about my recent RE journey and shared my investing strategy to jump into the Sacramento Real Estate market - specifically pursuing the "house-hack" strategy for my first property (hopefully a small multi-family) and doing some minor rehab projects on the units to force appreciation in a path to progress neighborhood. I would repeat this process, and hopefully build a strong enough income-generating portfolio that would also benefit from appreciation in the neighborhoods I would choose. I told him I am currently in the process of saving up for a down payment and do not intend to really buy until the end of the following year. 

He said he was very interested, and would love to go into business with me, with the intent to help expedite my down payment savings process, as he already has cash sitting on the sidelines. I told him that I had intended on creating a separate checking account for each of my forthcoming properties, and his suggestion was that we form an LLC so that we can expense items through that business.

Here is/are my question(s) for the community: 

1) Should we just be a Partnership, or form an LLC? 

2) What are a few key considerations I should be thinking of, when drafting our Business Contract?

3) Do you have any resources/books/websites/articles that can point me in the right direction with how to proceed with this? 

Additionally - I am looking at getting approved for an FHA or the HomePossible loan, so that I could take advantage of doing a low down payment via house-hacking, which would be great, as it would also allow me to better manage the property. He has no intention of managing the property, but would just like to put money in and be a business partner for the long-run as we build up assets. What are some other things I should be considering?

@Jesse Rivera 

Haha! I was waiting for someone to say something about it. I was definitely working on my marketing skills by way of crafting a witty, catchy title that attracts the best of the best to comment and provide insight, don't you think? haha. 

@DJ Dawson 
Thanks for your insight, man! Yeah, I've heard of people just replacing carpets in rooms outright once tenants move out, but I guess I would prefer to skip that step if I can help it. I will definitely circle back on this once I get a rental property in order. 

Hey @Clint G.!

Thank you for your response. I just did a quick google search for EVP and it seems to be the better option relative to going with LVP. How is the weather there in Texas during the Summer and the Winter months? Should I be worried about the effects of extreme heat/humidity on the flooring in the Summer or the cold Winter?