All Forum Posts by: Ethan Ducharme

My partner and I recently got an appraisal on our 4plex with the anticipation of refinancing and the appraisal coming around 200k. We purchased the property for 70k, put in 50k for rehab and the appraisal came back at 115k..... (Keep in mind, we completely gutted it. New wiring, plumbing, appliances, flooring, everything) We would have been much less surprised if it came in at 215k.  The appraiser used 5 comps, only one of which is a 4plex that is twice the age. The 4plex comp is not nearly as clean in terms of finishes and quality and was purchased 10 years ago for 110k. My question is... In terms of finding comps when you have the only property of its time and finish do you use duplexes of a similar age and finish, newer 4plexes, or expand your search radius?

Thoughts are appreciated!

Thanks!

The partnership is 50/50. What is the benefit or purpose of both people being on the loan. I understand being on the loan and not on the title could cause problems. Why not one person on the loan and both people on title?

My partner and I are in the processing of refinancing our 4plex and are wondering if there is benefit in just one of us being on the mortgage. We are going to continue to work together in the future and are wondering if it makes sense to just have one of us on the loan. If so can we still have both of us on the title, and just one on the loan, or only one on the title? Is there anything we should do to protect my interest if I were not to be on the loan or title outside the JV that we have in place? He has several properties by himself, and with another partner. This is our first together.

I also don't own a primary and currently rent, yet my buying power has increased due to the income of our 4plex. I would like to maintain that "on paper" buying power and am curious if that goes away if im not on the mortgage, title, etc. 

Thoughts!? 

Hey all,

I am wondering if anyone has any recommendations for lenders in the Denver area. My girlfriend is interested in purchasing a home in/around Denver and is looking to get pre approved and work with a reliable lender that isn't too pushy. Has anyone had any great experiences with lenders for buying their first home?

Thanks!

Hey everyone,

Historically I have filed my taxes online since it was pretty straightforward with one W2 income and no rentals. However, now I have one 4 unit multifamily (out of state) and am wondering if it is worthing going to see a CPA about it. It still seems like I could do it online and it wouldn't be too much to handle, however, I am not sure if there is anything I would be missing and worth paying someone to look over.

Do people have recommendations of who they use in Cache County or the Logan area who also have rental properties? 

If so, who do you use? and feel free to pass them my way.

Thanks!

Hey @David Gotsill thanks for the reply. This is a draft in which I also sent my partner to take a look at. Its still a little rough be let me know what your thoughts are to the answers to your questions.

The business plan for this 4 unit multifamily property is a buy and hold. There will likely be around 30k of rehab done to the property, which has been tied into the financing. The financing is through a local portfolio lender. The partners are myself and a friend with 50/50 contributions to purchase and everything will be split 50/50 on all fronts.

1: Business Plan: The plan for operation is to close on the property in the next week. We will then keep the units rented as is. As leases expire we will perform rehab as tenants vacate and fill units with new tenants. This will happen at a non-specific pace but will have all four units rehabbed and rented by this time next year.

2. Control: Decisions are made jointly about the property and all decisions are brought to the table by both partners to see if we are in agreement. The property is managed by a management company in which day to day decisions are acted on at their discretion. Any larger ticket items are brought forward by the management company to myself and partner in which we then decide what is the best course of action to take. I don’t think there are formal votes as we are both diplomatic, equal financial contributor, and should be able to come to some sort of common ground. If you think there is a better way to do that your advice appreciated.

3. Capital Contributions: Both partners are equally responsible for making capital contributions 50/50. Contributions are made when partners come to an agreement on what the capital expense is, if its necessary, the scope of work is agreed upon, and the total budget is agreed upon. Contributions will not be made unless both partners are in agreement on the previously listed items. If partners are obligated to make contributions by agreeing to terms and fail to fund their portion (I am not sure what is the best course of action here…)

4. Transfers: If a partner wants out of the property they are allowed to do so after fulfilling any previously made agreements. ie: funding agreed upon expenses, etc, etc. They can then sell their interests in the property but not before presenting the right of first offer to the other partner.

5. Distributions: All distributions are split 50/50, distributions are distributed once all expenses have been paid for first.

Thanks,
Ethan

Hey everyone, 

Looking for advice on a JV agreement. I know lots are out there but I am not sure if all are created equally. I am wondering if someone is willing to send me a copy of what they are using these days so I can gain some clarity in differences between agreements.

Property is in Missouri if that makes a difference.

Thanks!

Thanks Jermey,

I figured thats what would be the common response. Do you know of any pros or cons of going through our other friends LLC rather than creating one for ourselves? We are trying not to create a LLC yet between ourselves in order to keep costs down as well as being able to borrow from more sources.

My friend and I are planning on partnering on a four plex in the coming weeks. He is a relatively experienced investor, myself new, and his friend who has the LLC more experienced as well. I am looking for suggestions on how this deal should be structured in terms on a partnership, how that works, and if its possible to go through someone else's LLC?

In terms of partnering I'm trying to do my due diligence as I don't fully know the legal process and what that looks like on paper. Should we try and go through someone else's LLC or is that even possible? If so what does that process look like?

Thanks!

Thanks for the input Benjamin!

My FICO is around 770. I have put in 3 applications to other lenders and am currently waiting for them to be processed. Something you might be able to help me out with that I just got informed on. I just spoke with a lender about option, rates, amounts, etc, and he gave me a loan number that is way less than what I posted here. 130k. My income right now is about 4k a month net, however when I move to Utah its going to go down drastically and ill be getting $1500 a month for my graduate stipend from the university. (My income will remain at that amount until September and I don't pay for housing right now). The lender I originally posted said that they use my current and past income to determine my pre qualification amount and the lender I just talked to that used 130k said that thats incorrect. When an underwriter takes a look and sees that I'm making 1,500 a month for the next two years that ill never get that much.

I asked about what if I bought a house tomorrow with my current income. He said I could do that as a rental as long as they got continued employment verification from my current employer. If I were to do that, then move to Utah, live in my place, and change my job to the graduate stipend I would be in trouble if I got audited. 

My main question seems to be what is my best option? I have about 20k in savings, could comfortably put 10k down on a place. I have zero debt of any kind. No college loan, no CC debt, no car loans, etc, etc. I know I will be able to rent a room or two if I want to slash my mortgage payment, house hack, etc. Id like 250k available to me to work with, probably spend closer to 200k. It doesn't look like I'm going to get that hahah.... 

Advice is appreciated!

Thanks.