All Forum Posts by: Josh Calcanis

Thank you! 

@Lance Lvovsky by tax planning you mean cap ex deductions over the life of the expenditure or something else?

@David Dachtera You stated that neither will provide liability protection so long as your name appears in any ownership? So because my first two properties are a personal loan (not a business loan) and I'm the sole 'owner,' then even if they are placed in an LLC I'm still liable?

BP,

I just moved back to Florida from Seattle and one of the priorities was to find another REIA. I found CFRI and attended their general member meeting today. The speaker was going through a couple of methods of creative financing and one that really caught my attention was a form of seller financing.

Essentially he'd pay 0% interest, but 'overpay' on the purchase price. The example he gave was purchasing a mutli-unit complex in Florida that had been on the market for 121 days. Wasn't in horrible shape and could really be rented out immediately. It was priced at $740,000 and was tenants were not paying market rent. He offered $740,000, but with some unique terms. He'd pay $70k as a DP, then pay $5,000 a month over 10 years with a balloon payment of $70k at the end of the contract. His reasoning on over paying was essentially avoiding interest and creating another 20 years (ideal world we leave a 30 year mortgage to amortize) of free and clear cash flow. The property cash flowed $8000 a month.

Sadly, he didn't take questions, so I'm bringing this here...

1. For seller financing, doesn't the property need to be owned outright? No financing involved?
2. Where do you learn how to write up terms like this or is that a question for an attorney?

3. Is there a way to find out if a property is owned free and clear?

BP,

Just finished up with taxes this year after moving back to Orlando.

One thing my CPA brought up was possibly looking into an LLC strictly for protection of my other assets. Separating properties from my liquid cash, stocks, etc.

After looking around on BP and checking with my lender about a year ago, I decided I didn't want to risk the bank calling the loan due. This year after speaking with the CPA, I checked with my lender and he could not provide in writing that he's giving me the greenlight. He did say that 'they'd' (the bank) would never know. He also reminded me that since it was originally under contract for a personal loan and not business, that passing the entity over to an LLC would not protect me in the case of a default on the loan. He seemed to be giving me (not as attorney) advice and all the information he could. I like to cover my basis and that's why I tried to get something in writing.

From some of the experienced investors on here, what are your thoughts?

Is it worth the risk for my current portfolio, which is 4 units total (2 properties)?

If not, would it be smart to start up an LLC dba an S corp and throw future REI in there?

Should I have a separate LLC for each REI?

I completely understand that the majority of posts on here are not any form of legal advice.

@Benjamin Fredricks

I've got one that's worked with me for both of my properties. Great guy and even hooked me up with the property manager that worked out really well. He covers most of Central Florida. PM if you'd like his info

I'm just starting to meet with a few commercial players out here in Orlando and from what I'm hearing it really is something to look into. In my opinion, if you do it correctly, there seems to be less risk compared to multi-family.

My question is based on finding the value in land or shell. With a SFH or multi-family, you can throw together a pro-forma and find out whether or not it's going to be a deal. I'm assuming commercial isn't that easy? If it is, what should I be looking at when trying to understand the value of a plot of land or shell?

@Thomas Franklin

Thanks! That's really interesting. Really puts the ball in the buyers court so to speak. They get their numbers correct of course. 

Hypothetically if I were to take a streamlined 203k loan out and don't use the full amount carved out for repairs? Where do I go from there? Just a refi? The only problem is that if it's an FHA I'll be below the 20-25% needed to re

@Thomas Franklin

When getting a 203k loan, can you roll it into an FHA? As in put 3-5% down and still get the rehab costs rolled into the loan? How does the bank determine what the rehab costs will be or is that something the we would do? If we believe the repairs would be more than what the bank appraises them at can we back out and do a traditional FHA and handle the repair costs outside the loan?

Welcome to the game @Alex Boyce

Just moved back to Orlando to spend some more time here with my current properties. I think you're in a great spot too. I have a buddy that lives out in Winter Garden trying to find his way back to College Park. I'd check out CFRI and GOREIA in the Orlando. Both have large meetings once a month and multiple small ones spread out across Central Florida.

@Account Closed Looking forward to coming

@Denny Robert

I definitely will. That makes sense completely.

I was under the assumption MIP did go away like PMI, but I must have misunderstood the conversation.

@Denny Robert

Sorry for the delay computer gave out on me and I'm not the biggest fan of the BP app.

The only downside is the fact that MIP disappears after a higher LTV ratio and has different tax implications right?