All Forum Posts by: Ian Landy

What about if you set up a maintenance company that maintains all of the properties, then you have a real estate attorney prepare all of the lease agreements. Do you still need to have a licensed brokerage company?

What has seemed like such a distant idea has finally come together. We are getting through all of the paper work right now but within the next week we should have our LLC formed and funded.

Now that we can finally focus on finding properties and not the structure of the company it is starting to feel a bit like we are forgetting something.

Our team includes:

Acquisition:
I am a realtor so I have access to the local mls; my partner and I can narrow it down to a few properties of choice. An interior designer and general contractor will meet us to map out a game plan and verify what we need to purchase the property for to hit our numbers.

We have a good escrow officer and inspectors.

Rehab:
Our construction knowledge is limited and neither my partner nor my self have taken on a full rehab project before. We realize that that is a big disadvantage so we have made a list of recommended general contractors that we will be interviewing over the next week or so.

Once we decide which contractor to use we will have him prepare an estimate for him and his subs, who will manage the construction. After reading over the bigger pockets forums it has become apparent how important it is to get the contractors plan of action and budget written in a contract, so we will be sure and get that taken care of properly. We also have an affordable interior designer that will be working with the contractor to help put together a plan for the rehab. The intention is that the interior designer will bridge the gap of our limited rehab knowledge. She can help show us what materials will add the best value and can help the contractor stick to his budget.

Sale:
The interior of the property will be staged for sale.
I will be taking care of the marketing/sale of the property and I have a team of people that can help determine a proper sale price.

This is a pretty brief summary of what our game plan is. Does anyone see anything that we have overlooked or have advice for our first fix and flip?

It would also be great if anyone who has done a fix and flip through an LLC could jump in and offer any advice on the business front too. We are working on getting an insurance policy for the company. Are there other details like this that we have failed to address?

Thanks in advance, I look forward to your responses!

Hi Bill,

Do you think if you up the credit line, to say 500K there could be benefits using this method?

How much does the bank take the management portion into consideration? This may be a better question for a banker but is seems like if you were able to to a successful project using the secured credit line (for the purchase, rehab and sale expenses) and fully pay back the amount you borrowed vs paying off a company credit card for materials only, then credit could be built much quicker allowing for greater leveraging early on.

Do you know how long it could take to build solid enough credit that a bank would loan, using conventional methods of building credit?

Thanks for the feedback Bill!

Has anyone played around with setting up secured credit lines with banks where you secure the credit line with cash for the purpose of building credit. For example setting up a secured credit line of $95-$100k and secure it with $100k cash. Yes you will pay maybe 5% extra to use your funds, but in the end won't building the LLC's credit and having future opportunities to leverage that $100k you started with out weigh that interest payment?

If you have heard of doing this or done it yourself please chime in. Bank recommendations would be appreciated as well.

If you purchase property on this type of credit line can it still be considered a cash offer?

Thank in advance for your help!

Did anyone end up putting together a REI club in SLO county. I living in San Luis Obispo and would be very interested in getting together to shoot around some ideas.

Specifically I'd anyone is a wholesaler in SLO let's chat we can potentially help each other out.

Ian

For the purpose of flipping I see a lot of people recommend scorps but if you can tax an LLC in the same way as an SCorp where is the benefit?

Is there any one out there that is flipping buying, rehabbing and flipping properties in California that would be kind enough to shed some light on the structuring of their entity. Are you using LPs, LLCs, C/S Corp or a combination of the three?

I am trying to partner with a contractor and money partner and I want to find the best way that we are all protected. I have heard of people buying the properties as an LP and putting a C or S corp as the general partner. In california this seems very expensive with the franchise taxes.

I would love to hear what others are doing!

Thanks in advance!

I have been trying to set up a similar LLC but have been getting lost in the confusion of how to structure everything. Is there anyone that can recommend a CA RE Attorney?