All Forum Posts by: John McConnell

Originally posted by @Jay Hinrichs:

We used to do this in Silicon valley Palo Alto in the mid to late 80's when RE spiked for the first time.

you needed 20% down in those days and will prices going north of 300 to 400k back in the mid to late 80s in Palo Alto Cupertino etc.. it was common for a partnership on SFR;s

the one living in the home got the loan and paid the payments etc.

the equity partner provided capital ( downpayment) it was for 5 years.. house was then sold and equity split..  Owner occ got tax bene's  or they could just pay the equity partner back their equity plus profit and they owned the home.   many were done this way.. Not sure lenders would go for this set up today.. but that's what we did when the first down payment crisis hit.

Interresting @jay hinrichs. That actually sounds like a good plan. Im wondering if it would work today and if it would work for multi versus SFR. It sounds like something a tax professional and a legal professional would need to answer for the specifics for a given market. Trying to figure out other creative ways that can benefit a partner... and always learning. Thanks!

Originally posted by @Joe Splitrock:

@John McConnell are you saying that all partners are owner occupied. For example you purchase a 4-plex with three friends and each of you live in one unit? Interesting question. My first reaction was to ask if it is even possible to owner occupy and have partners. I don't know anything about this, but interesting topic. Hopefully someone who as done this will chime in.

 Thanks for the reply!  That is an interesting idea to split 4 ways..  I would wonder where the actual income would come from... Never really thought of that perspective.  What I am referring to would be for one of two partners to pool resources together in order to purchase one multi property (4 plex would be best but smaller would also work).  One partner assumes responsibility of the loan/mortgage while getting the benefits of the tax break as the owner/occupy tenant.  The other partner would/could put up down payment if needed or however financially.  I am guessing on the tax piece, not trying to sidestep the IRS but rather massage the partnership in order to maximize for both, since one partner is getting all of the tax benefit could the profit for the other partner become a draw of sorts?  Or even an understood written agreement that all of the profits would be mutually used for equity building or re-purposing into other investments.  I really don't know how the final exit would look like after everything is said and done.  I would guess for legal purposes the only name that could be on the mortgage would be the owner/occupy partner so not to cross tax boundaries.  Thoughts?

If you were to start out in a small owner occupy multi deal would it be beneficial for someone to partner with another investor?  How would you structure the deal?  How would the cashflow look (would there be any tax benefits)?  Would there be any reason you would NOT do a deal like this?

And the black diamonds meeting is tonight in Waltham.

@ben Leybovich .... Check out some of his posts/blogs/podcasts. 

very nice. Just starting and getting that first property under your belt is always the biggest hurdle. If you have been studying real estate for a year and have a solid mentor you are leaps and bounds ahead of a lot of new investors. I would sit down and figure out what strategy you may want to invest in for long term...what your exits will be.. What you want your money to do for you and what kind of return you are looking for. I love the idea of getting a place big enough for you to live in and rent out the rest. Land lording is not for everyone but it is one of the building blocks in my opinion. You have to at least understand the fundamentals of it even if your future strategy is not to be a landlord. You could certainly partner with someone. Maybe find a wholesaler (at local REIA) where you could get into a decent deal...you have to determine what numbers work for you... I would guess that hard or private money would be the way to break in and you could then refi out at some point. You may start talking to banks and mortgage brokers in your area in order to establish the relationships that will help you in the future. I just talked to one the other day and came to find out that we have a common interest in cars. A great ice breaker and he will not forget me too soon. Good luck and I'm very sure that you will find whatever answers you may have here in these vaults called bigger pockets! Happy holidays as well and may you have a safe and prosperous new year!

J Scott's book on estimating rehab costs. Quick read but wealth of knowledge. Might as well get the bundle from BP for a good deal. Brandon Turner

What location?

I would agree. That or setting up access if you want to be a little more fancy. Maybe even some data analysis software out there for general data aggregation. Either way you would have to set it all up. The initial putting things in place would be the most work. After that just plug in numbers and go. I you did get all of the data you want put together and can find someone who is a Visual Basic wiz they could take the database and pipe it out to a gui program quite easily. The best place to start is with pencil and paper or even a whiteboard.

Thanks for the invite! you may also want to post on FB with some of the local investors also (REIA, Black Diamonds, etc...).