All Forum Posts by: Jake Wiley

You'll probably need to move really quickly, and likely with a local bank assuming that you have a contract deadline and the bank will require an appraisal.    

If you have the time, I'd start calling around to all the local credit unions/community banks to get an appreciation of their current rates etc and how quickly they could get something done.  

Hate to hear that the terms have changed so dramatically.   Good luck.

Theoretically, the raising of the interest rates should cool down the rapid appreciation we have been seeing with hopes that it doesn't create a decrease.    If done correctly this will also take similar pressure off rent increases and the market will reach a more stabilized equilibrium.     If things go too far too fast, then the market could overreact and cap rates could go up to fast, creating a wave of defaults etc.    

Getting outside of theory, no-one actually knows what is going to happen.   In looking at deals, you really need to be mindful that rent growth, etc that we've seen for the past period will likely not persist (it can't without runaway inflation), thus you can't buy for projections/pro forma numbers.   

Rents are driven by demand, in a world where there is a shortage of housing rent pressures will remain, and that will drive the NOI of properties, which coupled with the Cap rate is the value equation. Debt service is not a part of the NOI calculation, as it is different for every structure, however, debt service is very real on a cash flow basis and absolutely needs to be factored into which deals are right for you. Assuming cashflows are pinched because of rising rates, this will reduce competition and drive up Cap rates, but its not a 1 for 1 correlation on a particular property.
   

I've never done this, and if you are just wholesaling I am not sure what the strategy is.    Seems like you'd be boxing your potential buyer into a landtrust they may not want.     

What are your thoughts on why you'd want to go down this route?    

Agreed you need to be mindful of why your clients are coming in.   They are paying for lessons and want it to be about them and their lesson.    However, if there is a natural break or you need a conversation starter, ask them what they like to do when they are not working or playing golf?     Some folks may reciprocate and ask you the same question, and that is the opportunity to share your passion for real estate investing and what you are doing.

It's a fine line, as you don't want to seem like you are pitching because that is a huge turnoff.    If they are interested, they'll tell you.   It might not be a today thing but three visits or a year down the road when they ask you how things are going.  

Good luck
   

Congrats on the reno!    

If you've got some decent-sized employers in the area with the right demographics, seeing if you can get in to post on their bulletin boards and break room areas would be a good place too.    Sometimes the non-digital, physical post makes it seem more inviting.    

I am not sure exactly the purpose here. Typically you'd use a DBA if you were operating the property personally (sole proprietor) but wanted to present like a business, you'd file the DBA to allow you to do such legally, or if the LLC name was not what you'd want to use for doing business.

The LLC, if operated appropriately, will provide for liability protections, whereas a DBA does not, and is really just a legalized name you can use around the actual business structure.

Hopefully, that is helpful.

Yes that's possible - However you need to be thinking about the outstanding mortgage from the old to the new property.   If it goes down, the difference would be considered taxable boot.

Here's an excerpt from Investopedia that it explains it pretty well.

"One of the main ways that people get into trouble with these transactions is failing to consider loans. You must consider mortgage loans or other debt on the property that you relinquish, as well as any debt on the replacement property. If you don’t receive cash back but your liability goes down, then that also will be treated as income to you, just like cash.1

Suppose you had a mortgage of $1 million on the old property, but your mortgage on the new property that you receive in exchange is only $900,000. In that case, you have a $100,000 gain that is also classified as the boot and will be taxed."

You need to be open to any possibility that increases your cashflow.    You'll likely find that the time pressure of identifying three addresses in 45 days that you are going to close on is not a given.     To find a strong investment, it may be several or it may be one.   Good luck!

I'd say in both cases you just need to firm up at least your next 60 days.     There is no requirement to be in a perpetual month-to-month type scenario.    I agree that you need to be able to plan and its not possible to show houses or work on the next tenant if the current tenants have the flexibility to keep changing their minds.     

I'd give them notice that you are not going to do month to month anymore and that you can do a 60 or 90 day lease to help them out, but you need more clarity and you require 45-60 days notification.

 Good to know.   In that case - choose wisely who you work with.    Not all agents are great investors or understand the mindset of an investor, even if they are great agents.