All Forum Posts by: Harrison Smith

I am an agent in Southern Maine and my team is based in Falmouth and covers Southern and Central Maine, as well as the Bangor area. We could take you through Greater Portland, out to Standish, and up to Bangor and do it within one team so you had continuity in your representation. Would love to connect with you if that is of interest. 

@Tom Anderson A good friend of mine started the company Safe Environmental Solutions. They handle all sorts of nasty stuff (PCBs, Asbestos, Lead, etc.) and if they don't do this work I am sure they can tell you who does. Call them and ask for Chris Lewis. 

You can also contact a local company like Maine Properties that does maintenance and remodel and see if they have a contact or can do any of that type of work. 

Good luck on this, certainly a situation we all hope to never get a call for. 

@Watson Josue Congrats on taking on the 90 day challenge and taking action. 

@Mark Wurtemberg offered up a few good options (outside investor, 0% credit card, and 401(k)). Another option would be a HELOC on a primary residence (if you own) or a LOC secured by an investment account or other asset. Hard Money could be a potential last resort, but only if you can refinance that loan in the short term since the cost is high and term is generally short.

Whatever path you choose, best of luck on your investment. 

@Steve Napoli

@Ashley Victor I would pay her like a buyer's agent since she basically represented you, negotiated the deal, and got you to closing on a property. Most buyer's agents are making 2-3% of the acquisition price, so pay her $3,200 - $4,800 and move on to the next deal. 

@Ivan Sokolovich I am looking forward to it.

@JD Martin and @Ben C. nailed it. If you have experience as a GC and it is the best use of your time to be your own GC, then go for it. If you have never been a GC and/or its not the best use of your time, then don't do it. Don't take a good investment (property or time) and ruin it.

You might save some money as your own GC, but if you are not the best candidate for it then it will end up costing you in the end. Also, you are investing your time and what other things could you be doing with that time that might be more valuable? Money is not the asset, time is the asset. The use of your time is what will bring you wealth, not saving a little bit of money here and there. 

@Account Closed nailed it though, especially with his second point. Seed Capital is critical to getting started. Working Capital becomes irrelevant if you can't get started. Banks are going to expect you to put the first dollars into the deal before they will participate, so without seed capital to put down the banks won't consider giving you access to working capital. Unless you are well capitalized and don't need participation from lenders, then seed capital is the critical piece of the equation to get things going. 

How much of your cash you allocate to seed capital vs. working capital really depends on how big a project you are looking to take on. I am always a believer that you hold some back as a reserve, so you put in the seed money, hold back a reserve, and whatever is left could be used as working capital (in addition to any lending). 

@Charles H. In its simplest form, you need to form the LLC with the Secretary of State, get a Tax ID, and create/sign an operating agreement. At this point, you will have a recognized and functional LLC. On an ongoing basis you have to do your annual filings to maintain the LLC, keep minutes and records for the company, and ensure that you maintain the key business necessities (bank accounts, insurance, etc.) to show that this is in fact a business. Your state may have some requirements that I am not aware of, but normally this is about all you need to create an LLC.

Just keep in mind when you start to own properties in an LLC, you are now operating as a company which means commercial lending, personal guarantees, pass through taxation, and all of the other considerations of being involved within a company and not personally holding these assets. @Christopher Smith is correct that you can hold these assets pesonally and mitigate risk through other means, but really is up to you and what you feel is best for your situation.

@Michael Ablan Thanks for sharing. This is the dark side of buy and hold investing that everyone dreads, but your story shows that there are benefits to going through with it and it can work out better in the end once you take the plunge. Good luck with your new group of tenants.