All Forum Posts by: Matt Lane

@Victor N.

Thank you very much, this is very helpful!   I have already met some of the tenants to inform them that we are the new landlord to which they responded that section 8 pays for them but I didn't know better to ask for their specific case officer.  

Once again hanks for the clarity 

@Eric DeVito

 from my understanding usually the tenant if its a single or multi fam thats rented out and/or has separate meters.  if its an owner occupied with a tenant and there is one meter it is negotiable depending on rent and how eager you are to carve out a portion of the utilities 

I am purchasing an REO MFH which i just found out is all section 8 tenanted. From what i can see from the hall ways and the one apt i got access to, the owner nor the tenants maintained it well (mainly cosmetic). My question is, can i simply evict all the tenants in order to remodel the property to resell to an investor vacant? If so, how long is the process and what do you have to do/prove? I assume i would need a specific reason to do so? To my knowldge the building is not rent controlled/stabilized since its actually fairly new construction (5 years old)

If not, what other options do you have?  Just cash for keys?

If anyone is familiar with what the going rate is for cash for keys in the queens/brooklyn market, i'd appreciate it. 

Also, how do you go about finding out what the tenants have been paying in the past via section 8?  I know this sounds odd considering i'm the owner now but i'm a silent investor in the purchase and this is being run by my partner who doesn't like to share his trade (yes this is not the ideal partnership!)

@Charmaine M.

 Unfortunately 250K for a two fam is a tight budget for anywhere in queens.  I assume thats a budget including a mortgage?  Have you dertermined that budget yourself or have you spoken to a reputable mortgage broker to determine what you are qualified to borrow and what you can afford on a monthly basis.  By doing this you can then reverse engineer the numbers on a two fam and figure out what you can afford after taking into consideration the rent you would earn.  forgive me if you have already done this and come up with the 250K budget 

Also, most SFR and two fam houses in queens have a basement with a separate entrance which is not legal to rent however the vast majority of owner occupiers i have met do rent them. I am not advising you to break any laws just letting you know whats out there

thanks @Marlon Wilson!

Welcome @Alberto Rodriguez!  Also a fellow finance guy (FX and derivatives) transitioning to real estate investing full time.  I found bigger pockets the same way, listening to the podcasts twice a day on my commute to and from wall st.  Taking the plunge to make the first investment is definitely the hardest part quickly followed by finding properties but once you pop your cherry (am i allowed to say that here?) it gets easier.  I started investing back in 2011 in income producing properties but am now becoming an active flipper/developer which is a whole different animal.  

The best thing to do first is to define what you are interested in starting with, single fam, multi fam buy and hold or flip and what market.  Narrowing down your options will help you direct your energy especially since you are doing this on the side

Hope this helps and best of luck! 

@Matthew B. i didnt ask but i remember hearing something in the past about LLCs with two members are usually better than an LLC with one, i believe its because you itemize your expenses on the LLC and then carry over the net profit or loss on to your personal tax return. When i setup my first llc for buy and hold properties my cpa at the time suggested it for that reason so i wouldn't have to itemize these expenses on my personal return since i likely would have a net loss due to depreciation and expenses. Best bet to confirm with your cpa before you set it up if you're concern

Welcome to BP @Michael Reavis, always great meeting more NYC people here!

@Matthew B.

 So i spoke to an accounting firm a bunch of the people in the business use around here and this is what he suggested.

- 2 member operating LLC that everything flows up to

- Underlying LLCs will be owned by the operating LLC and yourself as the second member, but 100% of the profits flow to the operating LLC

He said checks for purchase/sale should come out of the underlying LLC ideally but he has clients where that doesn't always happen for a variety of reasons. Seemed to imply its not the end of the world if that happens from time to time.

He said you can use the operating LLC account and credit card to cover all other expenses which may not be applied to a specific underlying property, he suggested I get a corp credit card for this LLC as opposed to one for each.

He also said this structure is good if you ever look to get a mortgage on a property or bank loans in the future as there will always be one LLC (operating LLC) which will file a tax return and likely have income as opposed to several LLCs some of which profit one year and lose other years and are erratic. He claimed banks like the simplicity and transparency of a setup like this for analyzing everything when issuing a loan.

Not sure if this helps or if anyone else has any input but i'm likely going to proceed ahead with this unless i hear anything better

@Matthew B. That's what I was trying to say but not nearly as eloquently.  I hope that's the right way to go about it from a legal and accounting method because that's what I'm thinking about doing at the moment