All Forum Posts by: Jerome Hanson

@Steve Moyer I'm understanding your dilemma here. Your actual concern has nothing to do with LLC formation but the fact that you move a lot. From what I understand, each state is different and you'll have to look into the state's rules about continuing to operate the LLC even though technically you are not a resident there. Being in the military this could happen to you many times. I am assuming that much like in Arizona, you would have the option of appointing a statutory agent (who is a resident there) to the LLC and operating it in that manner even though you have been stationed somewhere else. I don't think you should take advice from any one person here. You should dig into the corporations regulations of Pennsylvania and find out what you're allowed to do as someone who may not be there a year or two from now but still wants to run an LLC in the state.

There is no "going rate". Everything will be up to your negotiation with the tenant. Your negotiation is this: pay me a fee to ensure I don't sell this home to someone else for a certain amount of time (12 months?). Otherwise I'm selling the house. The lease and the option are two separate contracts. The standing of the option contract is dependent on the good standing of the lease contract. If the lease terms are broken, so is the option contract and tenant loses the fee.

The only other thing for you to consider is: why pressure the tenant? Let them beg you to buy the house. you continue to collect rent and eventually the rent needs to increase. They sound like solid tenants.

Either way you decide to go, with or without an agent, your first step here should be to find your private lending sources.  Once you find who you'd like to work with, explain to them what you plan to do and use one of the homes you've identified (without even doing a walk through) to get your pre-approval or whatever the hard money lender wants to call it at that point.  The reason I say to do it, regardless of whether there is an agent is to give yourself peace of mind.  Now you KNOW you'll be able to come up with funds and it will ease your fears a bit. Regardless of what property you chose, the lender won't care because your plans are basically the same.  Switch the property, tell the lender your detailed plan, the lender will do their due diligence and all still falls on how well you've set this thing up for success (with or without an agent). And once you really get to the point where the title company/lawyer draws up the closing paperwork, you could have even switched hard money lenders/private money or decided to finance in another manner by that point.  Just tell the title company and they'll do what it takes to change the paperwork and complete the deal.  Everyone wants to get paid, and you are their ticket for payment.

As far as exclusive agreements with a particular real estate agent.. I've done those where it is specifically for ONE property. Never sign an agreement holding you for length of time. I feel it's fair to sign with an agent for ONE property if I don't have access to the property on my own or can't get hold of the sellers myself. Some agents like you to sign on for like 6 months of "searching" with them.. which is just ridiculous if you're an investor.  That might work for owner/occupants.. but not us.

@Charles Parrish wow. Besides seeing the note, I didn't realize there were other creative ways to use the tool. Thank you. Much appreciated.

@Tim Davis Appreciate the response.  I was thinking along those lines.  I'll ask my Title Agency, who are servicing the loan if they'll provide end of year reports, etc.  It's a bit early in the year and I'm not sure if they've sent one or if they even do.  I'll also get a spreadsheet going for myself.

Isn't there a limit on how many owner finance deals you can be the lender on though? You sound like you've done quite a few.  My understanding was that after a certain number, you have to qualify as a bona fide lender.

@Nathan Gesner thanks for the advice and concern, but I'm not sure how you're able to take a stab at what my profit margins are when I didn't give any specifics on the deal.  My question was really about tracking the income, reporting the taxes and rules of thumb I should be following in that respect. In other words... all the income and tax implications of being a lender in this type of case.  Thanks for the other input though.

Hey all,

so I recently completed an owner finance deal as the owner/lender.  The checks have started coming in but I now realized I don't really know how to best track this income.  For instance, should I be making a spreadsheet of principal paid, interest paid, servicing fee, etc for tax time?  What are all the implications I should be thinking about now that this passive income is coming in when I'm not really the "owner" anymore, just the lender?

That is definitely very interesting. How do you think that will affect the market to the South of you... Cochise county area?

@Account Closed Thanks I'll check it out.

Hey all,

I'm trying to make sure I have all my ducks in a row and since tax season is almost afoot.. well, what better person to add to the team than a CPA.  

In your experiences, what are the most valuable questions and inquiries I can ask when trying to figure out if they are right for a real estate investor?