All Forum Posts by: Hy Schmiedeskamp

Hey Nick, what I've found is the property is over 4 units then you will usually have to get a commercial loan.  4 and under and you can find banks to do regular loans. I have commercial loans through Central State because they are a "portfolio" lender, meaning I can group a couple properties together under one loan and they hold onto the note. They aren't selling them off so they can work the deals a little as they don't have to meet Fannie Mae guidelines. Terms are going to be better though with a regular Fannie Mae type mortgage.

I didn't have business models, no fancy graphs, just sat down with a few bankers and asked questions, gave numbers and eventually made some deals.  

Best way to offset this is to pay any credit cards before the statement cuts so they report zero balance and try to raise the limits thus lowering your overall credit utilization. It’s just how the credit score game works.

Kyle Grimm Good thread! Since I see you're from Morton, I'll mention I worked my first 10 years out of college for a Martin Equipment branch over in Palmyra, Missouri. Currently manage a pallet recycling and manufacturing company. Started real estate investing about 3 years ago doing most of my own labor every night and weekend.

That does seem really high. Maybe you could call another title company and get a quote to compare. I am pretty sure the last house I closed on was between $300 and $500 for title insurance. This was in rural Illinois.

Also this would be something I would spend the money on an inspection. I have used and recommend Bruce Hutton with Midstate Inspection Services. Bill Penn with Integrity is also good although maybe not as familiar with commercial style buildings.

@John Baughman I have also watched that building over the last 2 years. My younger sister even lived there for a few months about 15 years ago. Quincy has several investors and the fact that no one has scooped it up has always made me wonder about what's wrong with it. On paper it looked great to me also, but my wife has yet to be convinced. 

A couple of thoughts: 

1. Realistically the vacancy rate has been 30%+ according to people I've talked to. With a more run down place like it is, it will be a lower quality tenant with a bunch of turnover / evictions.

2. Make sure it doesn't have some structural issues that could be a big deal to fix. I know the front steps look pretty rough. I have not been inside the property though. (At least not for many years and I don't remember much. 

3. With other investors like Bret Austin continually adding units (like turning the old schools into apartments) and Kuntz building another apartment building on the north side of town, I feel like rents will be flat for awhile. 

If you can go in with no money down, I would still be excited about that. Just make sure rehabbing it doesn't eat your lunch. 

Keep us posted on what you find!

Yes, I believe you can change this electronically on the IL Sec of States website. Easy to do.

Wish Viki would have come back to tell about it.

https://www.biggerpockets.com/forums/12/topics/305913-re-wealth-expo--is-it-worth-the-hype

The protection would be the same for a single member as a partnership. And yes, I filed myself, really not much required just filing out the form. And then every year sending in another form and payment to stay current. If you find a lawyer familiar with series, it would probably be a benefit and help answer some of these questions. Not all of them seem to know that much. (Or they would rather set up new LLC's for you so they can charge more. That's just the feeling I got from interviewing a few lawyers)

Setting up an LLC (series or regular) is easy through the Secretary of States website. Talk to your CPA first. I made two mistakes that I fixed afterwards. First, I formed a regular LLC and then ended up changing it to series about 6 months later. That wasn't a big deal just had to add some paperwork and pay another few hundred. Second, like you I thought I should have my wife as partner. Unfortunately then it cannot be taxed as a disregarded entity. Thus more complicated and possibly higher taxes on a passive real estate investment. So after talking with my CPA, I sent in another form and had her removed as a member making it a single party LLC.