All Forum Posts by: Greg Henderson

I believe the question is, can you sell your property, that's in your personal name, to your LLC and take the tax break. You no longer own it. The LLC does.

I’m assuming it isn’t a “at arms length transaction.” Perhaps the only real way to do it is to sell it to a parent who then wills it back at death To gain the step up in basis?

Anyone come up with an answer?

That's what a local lender is telling me too. I just couldn't believe it. I've listened to hundreds of podcasts, read books, own 19 doors, flipped houses, and I've never once heard anyone mention this. Everyone assumes 2+2 = a quad if it's on the same property. 

A local lender said it is commercial because it's two dwellings even though it is on the same tax parcel. The addresses are labeled A, B, C, D. I've searched and not found a definite answer. Has anyone dealt with this? Looking for real help and not an opinion. Thanks

@Amit Shah Moving forward I would add an abandonment clause to your lease. You should not have these questions. Put everything in your lease and have a lawyer look at it. If situation A happens, you do B. Spell it all out clearly and review it with the incoming tenants. They will not read it all. In Mississippi, we are a self-help eviction state. Its absurd what some of you have to go through to make people pay their debts... 

ABANDONMENT. If at any time during the term of this Agreement Tenant abandons the Premises or any part thereof or any of the utilities are disconnected, Landlord may, at Landlord's option, obtain possession of the Premises in the manner provided by law, and without becoming liable to Tenant for damages or for any payment of any kind whatever

DEFAULT. If Tenant fails to comply with any of the material provisions of this Agreement, other than the covenant to pay rent, or of any present rules and regulations or any that may be hereafter prescribed by Landlord, or materially fails to comply with any duties imposed on Tenant by statute, within thirty (30) days after delivery of notice by Landlord specifying the noncompliance and indicating the intention of Landlord to terminate the Lease by reason thereof, Landlord may terminate this Agreement. If Tenant fails to pay rent when due and the default continues for three (3) days thereafter, Landlord may, at Landlord's option, declare the entire balance of rent payable hereunder to be immediately due and payable and may exercise any and all rights and remedies available to Landlord at law or in equity or may immediately terminate this Agreement. ***Landlord reserves the right to self-help eviction which can include termination of utilities, changing locks, removing tenant property, and any other remedy available under law. Self-help eviction does not require a court order writ of eviction. Written notice may not be given. By signing this lease, Tenants accept this as notice.***

@Mrinal Parashar

My lease says "Upon the due execution of the agreement, tenant shall deposit with the landlord..." Once I have the deposit, that means the lease has been executed in my opinion. Does it matter is the lease starts today or next year? It's an executed contract. Would like to hear an attorneys point of view.

Lowes and home depot have a business account option. They're great for multiple projects going at once because you give a PO at checkout and its nicely organized in the online portal. I strictly use a credit card (capital one business) for every other purchase I make for the 2% cash back. I have one for each LLC. That helps keep me organized and its set to auto pay the full balance at the end of the month. I also like the american express card for employees. The app will show their name by each charge. They text me the receipt and I simply attach it to the charge in the app. They have a use beyond over extending. I certainly wouldn't recommend using credit cards for a rehab if you don't have the savings to cover the expense. If you're using them for rehab, what happens if you go over budget and have no more options? Then banks look at your recently trashed credit score and will deny you a loan. That's desperate territory. Get financing first. If you go over budget, use the cards.

The 3 local banks I use have all looked at my personal finances and the deal itself for a DSCR loan. They required I sign as a personal guarantor for the loan even though its for a LLC.

I'd just tie up one property at 75%-80%. Doesn't make much sense to tie them all up and get the same amount of money. If you want or need to do it again later, they're not tied to the loan. I just got a quote yesterday for a cash out refi through a local commercial lender @

5.6% amortized for 12 years for 80% LTV. Balloon at 5 years

or

5.35 for a 5/1 ARM for 15 years at 75%.

1% origination and no additional points.

@Joe Jung

I manage my own property. If you're looking for C+/B property, I'd look west of Hwy 59 and south of W 4th street. There is a waterway that floods around arnold line and around lowes in west hattiesburg you might have to stab your way in and shoot your way out. @Christy McLemore is a knowledgeable agent in the area. I'd start with her.