All Forum Posts by: Account Closed

@Basit Siddiqi thank you sir!

@Caleb Heimsoth thanks for the help. The issue is that this single property has a need for a specific skill set, my father in this particular scenario, and this same job will be outsourced in the future. I hope to have multiple properties under this entity, so changing equity split to compensate based on one job at one property doesn't seem to fit the bill.

Assuming we just pay him for his time, does the business just write him (an owner) a check? 1099? This is the part that I'm unsure about.

Hello all,

I'd really appreciate a few thoughts from this amazing community. I'm in need of some help on the best way to manage the rehab costs of a new property within a three-person LLC/partnership. This is the first property for a newly formed family partnership.

We have a 33% LLC in Texas used for SFRs. The issue I'm having with this new entity is the operations components exceed my scope of knowledge.

I'm seeking how best to manage the disproportionate expenses during the initial phase of rehab. I know that if one person is doing more of the work their split could be disproportionate to reflect this. However, this is a family partnership and I want to keep the equity split identical. How/can I compensate the one doing 20-30 hours of labor. Our LLC has a small business bank account: so, just pay them an hourly rate from the bank account? Guaranteed payment? Better way?

 I'm running in circles thinking about the different options and know just enough to over think this, I fear.

Thanks for any help you can provide!

@Daniel DeckerHello, Daniel!  Welcome to BP and I look forward to seeing what kind of deals you're doing down there in Abilene. I'm originally from Gatesville and lived in Lubbock for several years.

I wonder how many people understand the "prettiest town Ive ever seen" reference. 

Enjoy the site and "see" you around. 

Joe

@Kevin Brown

I am from Coryell county which borders Bell county, to the north. The National Bank of Central Texas has always been a great bank for my needs(when I lived in Texas, anyways). They have multiple branches in Bell county.  A close friend formerly was a loan officer for the Gatesville and Waco branches, as well.  I don't know specifics other than personally knowing a whole list of satisfied customers through the years; none of which were RE investors; mostly primary res, consumer loans, banking, etc. Good luck!

Joe

@Jay Lohn

 I definitely agree that just because the prices are cheap this doesn't mean the deal is all that sweet. However, I am walking the line between getting the most out of my limited capital and minimal cash flow/banking on long term appreciation. I am very hungry to REALLY start investing in real estate (not just as a hobby) and fear being fully leveraged right off the bat with all my eggs in a single basket. I guess I should focus on patience as well, after reading my own words. ha

@Sawyer Lubke

 I think Ill heed everyone's advice and stay away from that "can of worms" until I feel more comfortable knowing the things I don't know about investing in such an area.  I'm sure there are deals in the west metro but they sure are hard to find. I'm going to have to take some more creative routes to find deals than the basic ones I'm using now. Best of luck to you as well!

Thanks for the response, Mike.  I was leaning toward leaving that area alone unless I heard some success stories. I know there can be painful tenants and crime anywhere but I've spent several hours checking the Hennepin county website and that concentrated area seems to be the worst, by far. 

By the way, welcome to BP! How has it been going down in Chaska? Are you currently looking for more rentals? I live in the west metro area so if you ever want to meet up for some coffee and let me extract a couple notes about the local area and your current rentals, let me know.

I am originally from Texas and have access to private money down there but they are not comfortable with their money being invested up here yet, since I havent actually done a deal in MN. I am looking at investing down in Texas more and more thinking that area may be more "friendly" to starting out. The long distance sure makes it tough though.

Any suggestions on what direction I should look? How have you found your rentals so far?

Yea, I'm especially wary to start out in this type of area. I have only lived in MN for a year or so still trying to get a hold of the different markets, neighborhood to neighborhood. The barrier to entry is low, but may bite off more than I can chew right off the bat. Thanks for the reply, @Dan D.

Do any of you Minnesotans have investment experience in the Near North, Jordan, Hawthorne, Willard-Hay, Folwell, etc. area of Minneapolis. Crime is high so prices are obviously favorable. I am trying to find my first rental property and wonder if anyone has any horror/success stories to share. I am guessing most will suggest staying away from this area, just curious if anyone has ventured that way.