All Forum Posts by: Jimmy Jefferson

My brother and I both own a couple rentals of our own. We're looking to expand our portfolios and recently looked at a property together which would be a BRRRR deal. I found the deal, have researched the area, know what market rent would be once the place is fixed up, and have a good idea of what the ARV would be. Since the price of this deal was a little high, I decided to share the property with him and see if he would be interested in going in on it with me. He would most likely do a large part of the rehab work, as he owns a small construction company and has more flexibility in his work schedule. We both would bring money to fund the deal (most likely conventional financing). I've never partnered with anyone before so I have a ton of questions...

1) How much is my "knowledge" worth in this deal (if anything)? ie. researching the area, finding the deal, evaluating market rents, plan for the property, knowing what the ARV would be, knowing how to execute the BRRRR, etc. My brother does not know the area, so deal analysis falls on my plate. Is this knowledge worth a one time flat fee of X dollars, or worth any equity?

2) How have other people structured a partnership?  What does buying a property under a partnership look like?  

3) Have people created an LLC with their partner or just bought the property both as individual investors?

4) Any suggestions on bank financing with a partnership? 

Any info or recommendations are appreciated!  Thanks. 

Thanks for the info, all.  I will look into these meetings and try to get to one in the future. 

Curious if anyone attends or knows of a Real Estate Investing group in my local area.  Bucks County, PA and/or the Lehigh Valley (Bethlehem, PA)?  I've heard so much talk of attending these types of meetings and I'm just curious what peoples' experiences have been and if there's a good one out there?

@Doug Smith thanks for the info. The issue I see with forming an LLC however is that if I want to refinance with a local bank, then it would need to be a commercial loan which has higher interest rates and more money down requirements. I could purchase the property under my LLC then transfer the title to me as an individual but then I would end up paying a 2% transfer tax (per my local title company).

@Dan Barli thanks for the info. I've heard LegalZoom is a good online option to set up an LLC. I'll probably look into them and also keep in mind I may need to talk to a local attorney.

@Alex Bekeza thanks for that info! Do you have any names of specific "commercial" lenders that offer hard money loans like you're talking about? So far, every single hard money lender I've spoken with has told me I need to set up an LLC first.

I recently reached out to a few different hard money lenders to see what kind of loans I could get, only to find out that almost all of them only offer lending programs to LLC's or corporations. Has anyone else ran into this issue? If so, I would love to hear how some of you have formed your LLC's. Any website or services used that were beneficial in creating your LLC or corporation? Thanks in advance!

Hi @Jonathan Emery , thanks for the reply.  I'd be very interested in hearing whatever you have found to work for creative financing options.  As I've soaked up a good amount of my capital in my first two rentals, I'm realizing that I'll need to get a little creative on financing my next deals (because I do not want to wait a couple more years to build up another large chunk of money, before acquiring another rental).  Looking forward to hearing from you.

Jimmy 

Thanks for the info, Marc.  Naturally my next question... any specific resource(s) you have used to find property managers in your area?

Very interested in this as well.  I'm about an hour north of your location in the Doylestown, PA area.  I've bought 2 rentals just with conventional bank financing and now looking to expand utilizing other financing methods such as seller financing.  

Hi all, I'm new to BP, and currently have 2 rentals in my local area (Doylestown / Sellersville / Perkasie / Quakertown , Pennsylvania).  These towns are about 1 hour north of Philadelphia and 35 minutes south of the Lehigh Valley (Bethlehem / Allentown).  I'm looking to make any connections while also growing my real estate portfolio.  Couple quick questions...

1) Anyone in this general area... what are some of the best strategies for building your portfolio with limited capital? Success with BRRRR, seller financing, etc? I just used up a good chunk of my equity for my last rental purchase. I do not want to wait until I save up another $50K to buy another property.

2) Besides rentometer.com what other sources have people used to collect reliable rental income data?

Thanks,

Jimmy