All Forum Posts by: Tyler Weaver

Kind of.  They don’t qualify for a lot of mortgages. So you have to work with a local bank. Technically it would be a commercial loan. 

You will probably need to post what area the properties are in. I know there are a few banks in my market that would be ok with those terms, but that probably doesn't help you much. 

I would look for a mortgage broker that other investors in your area use. One way to find this would be to find a facebook group or a meetup group in your area and ask on that page.

3 properties in an LLC is a bit of an odd size for most banks. They would typically look for properties owned in your name. If you got around 10 together they would start being interested in the business at a commercial level as it is now a decent sized loan. So it will take some shopping around to find a local bank for this.

Well if they are letting the house get "plain ol' raggedy" then there is a chance there is a reason and they are looking to turn their equity into cash. 

You can just say you are looking to buy houses in that area as rentals or whatever your strategy is, and that their house appears to be a great size and look that you are going for or whatnot. It doesn't help if you say "your house looks like garbage, want to sell it?" 

Basically you are looking for a skip-tracing service. There are several out there that will charge per lead or you can do a batch at a time. Another option is an app like Deal Machine or PropStream that have skip tracing, can send letters, etc from the app while you are driving for dollars. 

The $550 cashflow is prior to any capex, vacancy, and repair reserves? 

Jacksonville seems like a pretty good cashflow market from what I have seen from other investors.

You can get examples of syndication business plans from looking at the current offerings of pretty much any of the above mentioned syndicators. 

Another good podcast to listen to is Target Market Insights by John Casmon

The early episodes really dive into how to do market research to determine the specific niche you will be focusing on. Also, then using the datapoints you gathered from that step is useful in making marketing material.

If you have the audio book from Joe Fairless, I would also recommend getting the print one. It is essentially a workbook that if you work through it you will have all the pieces necessary to get started. 

The book on Raising Private Capital by Matt Faircloth is quite good too.

If you purchased with a grant program etc, I imagine you are paying a decently high interest rate on your mortgage. You could fix the cashflow bleed by refinancing to your current mortgage balance for another 30 years. Rates are currently super low so there is potential you could get back into positive cashflow. 

Is there population and job growth in your market? If so, then holding for another 5-10 years could pan out. We are getting into the speculative portion of things but also trying to weigh the least crappy option here. 

Selling with a lease option could net you a positive cashflow and allow you to sell at a sale price higher than current market.

Like what @Luke Carl said, this does not really sound like an investment purchase. It is probably closer to buying a boat. It is unlikely that this property will make money after paying for management etc. Especially without a massive amount of market research first. If you have to scrape together the money for a down payment on a vacation home, it does not sound like the move to make currently.

There is probably something more going on than this. At minimum, if not hiring your own inspection to be done I would want to pay the previous inspector to meet you at the property and walk through some of the things in the report and discuss repairs needed etc.

Gotta preface this by saying I am not a CPA and this is not tax advice. It seems you have a lot of the basics to cover before worrying about how an LLC effects it. First, taxes are paid on the margin so being pushed into a higher tax bracket does not change your total taxation. For instance (this is wrong) but the first 25k is taxed at 15%, next 20k at 20% next 20k at 25% etc. So you are paying the higher tax rate on the money earned OVER the first bracket.

First, a conventional loan will not enjoy your house being owned by an LLC. There are ways to "sneak it into" an LLC but is that really how you want to run your business?

There is a schedule you fill out for rental property on taxes. You can capture things like depreciation, mortgage interest, utilities, maintenance on that schedule. Because you are house hacking it will get a little bit tricky because you will likely be separating the proportion you rent out vs what you live in.

Definitely talk over these concepts with a CPA. 

Matt Faircloth's book on Raising Private Capital sounds like a great next step for you.

You may also consider wholesaling your first few deals to work on developing your skills and building your funnel.