All Forum Posts by: Gerich Fellermann

Hello all,

I have a 50% interest in 3 properties in 3 different states and am trying to buy out my partner in each property.

#1 - Charleston, SC area - Worth: ~800k / Balance on mortgage: $230k / Excellent rental history 5y+ @ $3,300/month / Divorce buyout 

#2 - Syracuse NY area - Worth: ~600k / Balance on mortgage: $185k / No rental history (just inherited with brother) but in a desirable area so local realtors say it will rent easily in the $2,000-$2,500 range / Brother is partner

#3 - Kansas City, MO - Worth: ~200k / Balance on mortgage: $100k / Excellent rental history 4y+ @ $1,200/month / Divorce buyout 

First choice is to pay off partners in a clean lump sum now (one wants to buy ASAP in another market, the other wants to build ASAP), but I'm open to brainstorming for options.

I live in Portland OR and rent my primary address.  I am self employed and try to minimize my W2 income.  Credit is 800+.

I have ~$120k in an inherited IRA that I could liquidate as well, but would prefer not to if at all possible.

House #3 is least priority and could be used to offset the cost of the buyout on #1, but it cashflows so if I can keep it that would be great.

I know it's a tough rate climate, but I'm looking for any creative options, and lenders who operate in all three markets that could help streamline the process.  Bonus points for creativity in the creative thread!!

Let me know if any other relevant info is missing.

Thanks in advance for any & all help!!

Gerich

Hi all,

I've got questions on how to handle a situation with a couple moving parts. I'm an accidental investor but love houses & real estate so will continue to invest as cash allows and as I get more familiar with the game.

I live in Oregon and have 1 SFH in South Carolina & 1 SFH in Missouri. Both are rented with decent, but not stellar, cashflow. I want to keep the SC house long-term (it would be a good STR but have not done that because of distance), but am more objective with Missouri.

The house in MO (Kansas City) is in my wife's name only but we are separating and I will be taking over all title/operations etc as part of our separation. (SC house is fully in my name) She is amenable to this & cooperative. That means I need to both transfer title & mortgage to myself or an LLC I create. It was a 1031 financed privately because I just started my own business and did not have W2 income. The rate is high (6.5%), so I'm thinking I need to:

1. 1) setup a legal/company structure to protect current 2 houses & any future properties
2. 2) refinance mortgage & switch title of MO house out of my wife's name into mine or LLC structure
   1. quit claim deed from her to me
   2. *no ties to this house so could also sell, but am short on bandwidth b/c of new business so would rather hold for now and reassess later.
3. 3)refinance & switch title of SC house from my name into LLC structure
   

Down the line I will look to slowly add to the portfolio in either WA, WY (family), SC, NM (family) or continuing in MO).

Given my current mix of states & future intentions:
1) How & where should I form my LLC?
2) Would it make sense to look for a portfolio loan for these 2 properties? Someone to turn to for the next properties as well? Any recommendations?
3)Any legal pitfalls to watch for in the MO title transfer?
4) Any thoughts on the suitability of any of those states? (WA, WY, SC, NM, MO)

OK, I know there are a number of details to wade through, but thanks in advance for thoughts,

Much appreciated,

G

Thank you @Cory Carlson!  I'll check into Michael Redden.

Hi all,

I live in Oregon and have 2 SFH rentals, one in Missouri and one in South Carolina. The one in MO is currently in my wife's name but we've separated and she doesn't want to deal with it so I am refinancing the mortgage out of her name. I am wondering about the best entity and location to form for the MO house now with the SC house next in line. I am planning to add additional properties, which may be in other states (NM, ID & WY top of list)

Does an LLC for the MO house have to be in MO? (I do not self-manage)

Could I form a series LLC in TX or NV and then put the MO house into it now? If yes, which is the best state to form a series in from both a protection and cost standpoint?

If my LLC is outside of OR, do I have to register it as a foreign entity in OR? (I may be leaving OR in a year, FWTW)

Lastly, I'm very open to recommendations on your favorite RE attorneys to help me get it all straight and get it buttoned up.

Thanks all,

Gerich

@Dan Krupa you had a pearl in there - whether or not it fits my criteria, which it is very close to since the clock is ticking on a 1031 and we've got other issues to focus on right now.

Again, thank you all for your input!

Hello all, thanks again for the input....

I've never been under any impression that this is a screaming deal - it's meant to satisfy the 1031, avoid the taxes and buy us some time.

@Chris Mason I'm fully able to pay $162k, and willing to pay $162k for a house that's worth $162k, but not for a house that's worth $141k. I'd also rather not pay $147k off a potentially inflated appraisal for a $141k house.

@Robin Hunter Thank you for the thoughts - It is being rented for $1250, so not quite to 1%.   

@Russell Brazil Thank you for the info.

Much appreciated all!

G

Thank you both for the thoughts!  I do have both of the appraisals and went through them in more detail this evening.  

The comps were actually the same properties, but the condition on them had been downgraded from C3 to C4 (subject property is C3 - just rehabbed) which yielded larger net adjustments to subject.  

I will give the appraiser a call.

Thanks again,

G

Hi all,

I am working on a turnkey in Kansas City, MO and the appraisal (ordered by me through company referred by Lender) returned an appraisal that was $21k below the contract price ($162k ->$141k).  The seller then communicated with the lender to add additional comps which led to a revised appraisal $6k higher.   The TK provider is asking for a sell price at an additional $2k over the revised appraisal or $8k over the initial appraisal.

I have had good communication with the TK provider, they have been patient as I navigate this 1031 exchange as a new investor, and have no reason not to trust them, but this seems odd.

I have read posts here on BP about tips for getting an appraisal revised, so I understand it is advantageous for the seller, but how wary should I be as the buyer?   

Also for the record, 

- this would be an out-of-state purchase & rental & management so trust in the integrity of all systems being established is important.  The TK provider has a good reputation here on BP and has given no other reason to pause.

- this is a 1031 and we are outside of our 45day identification window so it's pretty much this property or taxes.

Normal?  Not so normal?   Red flag?

Thanks in advance for any thoughts,

G