All Forum Posts by: Jimmy H.

@David H. It worked really well actually. I found that out of the prospective tenants I spoke with probably 75%+ just wanted to have the legitimate façade of a formal office but really didn't need any more space than a single office/room and perhaps some infrequent use of a conference room.

Instead of renting my entire office condo to one tenant for say $1,100, I can rent two of the three office/rooms out for $500 apiece and utilize the third for myself. I could likely rent the third as well and actually achieve greater returns than leasing to a single tenant - I have yet to do that though.

I've been RE investing in the area for 8 or so years now. I am a real estate agent currently working on a brokers license and I'm always looking to network and make more connections with others in the industry.

Whether you've got a deal to potentially wholesale my way, want help looking for deals, advice, partnerships/JV, references or just to talk strategy give me a shout!

Can you cite a few of the clauses here @Nghi Le ?

I am curious as to how they distinguish "sweat equity" in the real estate industry from, for example, having your IRA own stock in the company that you work at.

Whether I work at a company the size of walmart or a 3 employee, family-owned C corp, it stands that I would be doing "work" to increase the value of that entity. Would it then be against IRA rules to hold the debt or equity of said company in my IRA?

Hey Anthony,

I was born and raised in Lexington and I have been rehabbing homes in the area since 2007.  I am a real estate agent and own a construction firm in the area, as well, and I would be glad to help you analyze this particular property, give you my insights/perspectives/advice and perhaps even partner on some deals.

Feel free to PM or email me.

I've never invested in real estate outside of 1-4 family residential rental real estate.

I spotted an office condo in a development where the builder had bad timing (2006) and the development got foreclosed on. All units have since been sold. It is a two story, 16 unit development and each unit has 1,000 sqft. The builder was able to sell a few finished units at around $150k before he went under and the unfinished units have sold since (mostly in 2011) for between 68k-90k.

I was able to acquire the last unit which was an upstairs unit for $64,500 unfinished. It is currently under construction and should be completed within the next week or so.

My concern is in being able to rent it. I recognize the office rental market in my area is soft. I normally have filled my single family rentals quickly via Craigslist advertising but realize this strategy may not be as effective for office condos. I also happen to be a real estate agent in my area so I listed the unit on the local MLS yesterday.

My question is this: what are some other creative means to get this unit leased that I may not have considered? I have had no interest yet from my current advertisements/listings and thought I might glean some insight from those with more experience in this area.

My market:
Class A: office space rents for $15-18 per sqft +
Class B: office space rents for $12-15 per sqft
Class C: office space rents for $10-12 per sqft

I am currently asking $1,500 but am including all utilities (HOA, water, insurance, electric, taxes) which should make my unit competitive based on pricing for its class.

Any ideas to (cheaply) help me reach my target rental market (small businesses)?

You've received good advice thus far, it appears.

I simply wanted to add: make sure you're not commingling personal and business funds of your LLC as such activities make it quite easy to "pierce the corporate veil", as they say. If you do not operate your LLC as a truly independent entity then the libaility protection it offer sis essentially nullified. This is true for other entity structures as well; something all sole proprietors and small partnerships need to be wary of.

There's plenty of info and examples out there if you google the issue.

Got married mid-2012.

I've been buying foreclosures on the cheap, renovating them, renting them out, and then getting cash-out mortgages on them based upon my assets, credit, salary etc.

I'm curious as to whether I should file jointly or separately. I'm not interested in tax advice here (nor marriage advice, LOL), rather I am solely interested in the potential consequences of each alternative when seeking financing going forth.

I already know that for my situation, filing jointly would most lower my tax burden, but I am more concerned about my ability to continue my strategy of "flipping" by using cash-out mortgages to keep properties instead of selling them.

I posed this question to my lender but didn't get a great answer, so I thought I'd post here to see what your real world experiences have been concerning what obtaining a mortgage is like pre and post marriage and whether different filing options have a material impact when applying for mortgages.

You seem to imply the quad needs renovation - is it not yet completed (developer went belly up) or neglected with a lot of deferred maintenance, etc.?

Either way, if this property needs work to be rent-able, I would calculate those costs into your expected base/total investment in the property and calculate returns based on that.

Also, without knowing the particulars of why there are 19 vacant quads in one area, I would ask whether or not you anticipate having trouble renting the 4 units out.

In short, I would prefer to invest in the property over a laptop, but more detail is needed.

@Jim Baum...do you have any links/resources that would further detail exactly which scenarios qualify for taxation and which do not; I have been unable to find much?

@Shanequa...good question: it was actually through a local mortgage broker who operates as a subsidiary/franchise of Ark La Tex Financial Services - they have operations in a good chunk of the southeast and Texas, I believe.

In general, I have always found the big banks to be more cumbersome to deal with and thus do not waste my time with them anymore. Of course, my loan usually ends up being sold to one of the big three anyways, but the application process is less of a headache.

When mortgage shopping I contacted two mortgage brokers and one small local bank and all three indicated they could do the loan. Two of the lenders, though, wanted to see two full years of rental experience reflected on my tax returns; I only had one year. Somehow, Ark La Tex was able to work around that stipulation.

In other words, I found the cash out refi mortgage process to be only marginally more difficult than traditional purchasing financing.

@David - Essentially I just want to lower my DTI to improve the terms of financing and ensure that DTI never becomes a limiting issue - I'm riding the max DTI line fairly close based on my home mortgage/salary and even though my properties are NCF positive, I still want to lower my DTI as much as possible to allow me to potentially pursue more unconventional, creative and larger investments.

@Mike - That's a really good point: simply defer those expenses wherever possible.

@Tom - I appreciate your perspective and I can see where your town got it's name, LOL. I wouldn't do anything I would lose sleep over but, like most things i life, there's a large subjective grey area there.