All Forum Posts by: Account Closed

Hi everyone, I am considering purchasing a property with a 20pct seller carryback. However, my bank won’t finance the other 80pct without a signed lease with 1.2pct DCR. I am finding this to be the ‘chicken or the egg’ scenario. What ate some good strategies that will allow me to have a tenant with lease in place first so I can utilize the 20/80 financing?

hi Lewis, I would be interested in seeing what you have. What I was looking at was a itemized breakdown of closing costs both at cash purchase and then again at refi. 

Hello BP, 

My wife and I currently own two rental properties in our own names. We are now in the process of purchasing our 3rd with the plans to BRRR it and refi into an LLC. We live in Pennsylvania.

Well, I went to legalzoom and setup the LLC today and am afraid I rushed into this without doing my proper homework. I setup the LLC in my own name as a sole proprietorship LLC, thinking this would simplify taxes and paperwork. Now I am afraid this may cause issues when attempting to refinance into the LLC if I am the only member of the LLC .

1) Is the single member sole proprietorship LLC an issue if my wife and I want to refi a cash purchase into the LLC and still file our standard taxes jointly?

2) I read that the sole prop still allows room for spouses to be involved to some degree. Will this setup cause any trouble with us maintaining our 'share it all' approach to our marriage in regards to the LLC's assets?

3) What is the preferred setup for a married couple who plans on continuing to invest together (when one of them is much less involved)?

Any input is greatly appreciated!

Hello everyone, 

I'm reaching out to the experienced BRRRR investors (pennsylvania preferably) who can give me a cost analysis for a BRRRR from beginning to end. I realize lender fees vary but what I'm trying to do is draw a map for all the associated fees beginning to end - (percentages of sale price will work also in lieu of exact $).

As an example, I'm looking for itemized cost for a 100K cash purchase with an additional 20K invested for rehab. Refinance at 80% ARV comes out to a 120K loan @ 4.75% rate.

Working under the assumption this is accurate, what other costs reside that need to be accounted for?

Short term loan is 6-12 months. Flat 10% interest whether 6 or 12 months. 

Ideally, my exit strategy would be the refi, but since the purchase price isn't going to be 70% below value - and I don't see obvious opportunity for increasing value - I'm not sure of what strategy could be used to purchase this. 

HI BP,

I came across an opportunity that I need some advice with. I have an acquaintance (lets call him Bob) who owns a beautifully redone duplex in an area that is on the rise. Bob is a professional contractor who did alot of work to this property to get it in great shape so there is little room to force appreciation with a BRRR. The property is a 2 unit; utilities are submetered and both units can bring in at least $2,000/month combined. Taxes are higher than typical for the area though which skews the numbers a bit.

Bob is a 'tired landlord' who wants to sell and move somewhere rural. Bob listed the property on MLS for a while but realizes he was asking too much and it's now off market. Ultimately, he said the property was recently appraised and refinanced for 160K. The trouble is that, although he has owned the place for 30+ years, he still owes 127K .

I had a long discussion on the phone with him yesterday and he is open to creative financing such as seller financing etc.  Whatever will bring us to common ground. 

Now, I have a partner who is loaning me cash to fund short term deals.  At the end of an agreed upon period, I repay him the full amount plus interest.  I don't want to tie up any of my own cash in this deal. 

 I would like to purchase as a buy and hold and pay no more than 140K.  If we can agree on that number, what is the best approach to financing this deal? 

@Chris Purcell Thanks for your input.  I PM"d you some info. 

@Shaun Weekes Thanks for the input as well. The IO is on the private money loan.  What concerns do you have with that arrangement? It's a flat 10% interest at payback.  Loan is 8 months.

Hello BP, 

I'm currently working on my first cash-out-refi deal with a portfolio lender. The bank will give me 80% ARV with no seasoning period - just need a valid lease. My private lender is a close friend who is charging me interest only on the cash loan. Before I get started, I want to put this out there to BP to make sure I'm not missing anything major:

 1) Cash will be wired direct to Title company at close by my lender.  Is there anything I need to be aware of to prevent unforeseen tax implications down the road?

2) When the Cash-out-refi occurs and I pay my lender back with interest, is there anything I need to be aware of to prevent unforeseen tax implications? 

3) Any additional cash that is pulled out and kept within our LLC - any tax implications on this?

I just want to get a full understanding of whether there is something I'm missing by moving this money around.  

Any help is appreciated! 

Thanks, 

@Greg H.  Thanks Greg. There's a lot of good information here.  Can you outline the itemized typical costs (Listing Price %s ) that are associated with a cash HUDhomestore purchase? Also, can you provide any guidance on how, if at all, a cash buyers offer may be handled differently than an investor purchasing by conventional methods?  I'm looking at a property now with a list price of 75K and am trying to figure out the best approach. 

Hi Everyone,

I've read countless threads on deal structuring and how it's an artform, not a science.  That being said, I wanted to inquire with BP for advice on our specific situation. 

We are investing with a partner who is going to be putting up the down payment and rehab costs for conventional loan. The properties will be held in joint LLC. The partners are based on the west coast but will be investing alongside us in our 'farm' on the East Coast. We will be 'boots on the ground' and will handle property management and all the other fun stuff that goes with locating and closing a good deal.

Let's say we decide to split 50/50 for all profits and cashflow.  10 years down the road the partners want to sell and we agree.  Does the partner typically get 100% of their initial cash investment back before the profits are split 50/50?