All Forum Posts by: John Clark

Can someone explain something about the buy, borrow, die concept of avoiding income taxes? I understand that you don't pay taxes on borrowed money. What do you do with the profits from the company to avoid income taxes.

The loan is an obligation of the estate and must be paid by the estate (sell assets) or by the successor/inheirator of the asset. There’s no profit because you used the money paying the obligation.

0 Votes

Quote from @Bear Geiger:

At Little Bear Creek Properties, we specialize in developing large tracts of land into individual lots for home builders in the Raleigh, NC area. However, we often face challenges in sourcing suitable properties through traditional MLS listings. As a result, we are seeking alternative methods for acquiring off-market properties.

While we have developed a robust system for identifying and pre-qualifying potential land parcels, one of the major hurdles we face is reaching the property owners. Our current approach involves identifying possible contact information for the listed owners and calling multiple numbers, but this process is time-consuming and yields limited results. Even when we manage to reach a working voicemail, owners often assume we are just another "we buy land" service offering far below market value.

Given these challenges, we are eager to learn the most effective strategies for locating potential sellers and establishing a professional, trustworthy connection that encourages serious consideration of our offers.

Telephone/voicemail is informal, hence casual, hence “we aren’t putting much effort into this.” So why should I, the property owner, put any effort into you?

Send written letters, nice stationary, handwritten envelope, explaining why you selected his property and what your vision is for it. Then state your track record. Close with asking permission to informally inspect the property to see if you can make your vision work. Don’t talk money yet.

2 Votes

Quote from @Kandice Morgenstern:

Does anyone have a good lease clause to outline responsibilities and expectations during mandatory evacuations? Evacuations due to wildfires are not uncommon in our area of California. Are the renters or the landlord expected to cover rent during the evacuation? My lease requires renter's insurance which should cover loss of use if the unit becomes damaged/uninhabitable, but I don't think renters insurance covers costs of living expenses incurred during just an evacuation. Any wisdom to share here?

Thank you!

Check with a lawyer, but I would think rent is abated. The tenant cannot use the property through no fault of his own.

0 Votes

Napa County, California

Quote from @Cristina Melo:

Hi team,

I just had a call with a sales agent to sign up for the Boots on the Ground program. It is a program that they do everything for you from finding the property, rehabing it, renting it or selling it in Philadelphia. It is a done for you kind of program. I am wondering if anyone has any experience with this program that could share their thoughts. It sounds like a good opportunity and I want to pull the trigger but I wanted to get some reviews since the program is a high ticket of $15K I couldn't find much online about this program or Brian Grimes.

Thank you so much!

1. Never pay. That’s my philosophy.

2. Never buy without personally inspecting and approving the property and INDEPENDENTLY, INDEPENDENTLY, INDEPENDENTLY, verifying everything from values to market rates, to approving tenant selection procedures and standards, to repairmen on standby, to everything else in Christendom that you can thing of.

I am not a fan of out-of-state investing, especially for those with less than 50 years of experience, and for them, they’re probably too old for the hassle.

2 Votes

Orlando, Florida

Two things:

First, it would be the ruin of a perfectly good country.

Second, we current Americans would learn to say “Eh?” a lot.

1 Vote

As others have said, network, network, network.

Get the roommate and see if you like being a landlord. Before you move out in two years, see what niche of tenants you like, and see if you can market accordingly. For example, some landlords like newlyweds who will move when she gets pregnant but are otherwise quiet. Others would take that 2/2 and rent out each bedroom to undergraduates, or rent to one and allow sublets. Problem comes when you get party animals. Finesse that problem by getting graduate students. Grad students are calmer, quieter, more focused, usually a bit more money. Your niche depends on location and amenities you offer.

1 Vote

Chicago, Illinois

Quote from @Gp G.:

Bathroom Floor at the rental property looks bad as attached. Any special type of flooring that you recommend to make it look better and less maintenance over the time especially when there is turn around of tenants. I thought of LVP but I'm not sure if it's a good idea in the bathroom. Tiles people may slip in the bathroom right. Please advise

1. The underlayment should be durock or other concrete board. No rotting. It goes over your floorboards.

2. use small tiles (1 inch square or smaller) for the floor surface. The grout between the tiles allows a run off of water and a gripping surface for your feet.

3. if you’re smart, use durock on the walls too, right up to the ceiling. The ceiling can be durock or greenboard, never regular drywall.

0 Votes

You should have two main lessons learned from all this.

First: Tenant screening. Better to let a unit go vacant than to get marginal tenants. That encompasses realistically knowing what the market price of each unit is worth.

Second: Stay in great neighborhoods. Ravenswood is a great neighborhood. You got lucky,

1 Vote

Chicago, Illinois

Quote from @Sam Brock:

I'm a contractor and currently building two houses on two lots that I own outright. The goal is to keep these for rentals.

I currently own the land personally and am funding the builds with a combination of HELOC and cash - no bank debt tied to these properties specifically. Once completed, the goal is to get them rented and then pull money out of each house to build a high performance spec. My property holding LLC would ideally own the land/houses and manage the rentals once completed.

When they are complete, I will have about $375K in each build and they should appraise around $675k each. My goal is to get back my $750k, pay off the high interest HELOC, and get another $200k or so out of them. Appraised value of $1.35m and looking to finance $950k.

Questions:

1. How does the transaction work between me personally and my holding company LLC? Unw do lenders view this?

2. What type of loan products would be available for an LLC buying a house? Can you do DSCR? All-In-One mortgage? Traditional mortgage?

3. How would you attack this deal?

Keep in mind that you will probably be required to sign a personal guarantee of the loans. You don’t have a large enough portfolio of houses for a lender to feel comfortable without a personal guarantee. Also, are you doing separate loans, or one loan covering both properties? Finally, of the extra $200k, how much are you putting into operating reserves?

0 Votes

Quote from @Trevor Davis:

In 2021 I bought a 4 unit property as my first investment property. Code enforcement is now telling me I only have a 3 unit property, so I have to kick my tenant out of the newly upgraded unit.

I got a loan on the property when I bought it. It appraised as a 4 unit property. I had it appraised a couple years later and it appraised again as a 4 unit. I have 4 mailboxes, and signs for all 4 addresses, and I've been paying sewer for 4 units.

I guess I need to set up a protest hearing, but what should I be doing before then? Do I need to get a real estate lawyer? If I want to prove my case myself, where should I look?

You never mentioned zoning. What is it zoned as? What does water service say?

Don’t be stupid. Too much is at stake. Get a lawyer.

0 Votes

Thornton, Colorado

All Forum Posts by: John Clark

John Clark has started 5 posts and replied 1198 times.

Post: Can someone explain the Buy, borrow die concept.

Post: Purchasing Off-Market Property: How Can We Effectively Capture Their Attention?

Post: lease clause for tenant expectations/responsibilities during mandatory evacuations

Post: Is Boots on the Ground by Brian Grimes a Legit Program

Post: What if Canada Became out 51st State

Post: Greetings from Chicago

Post: Bathroom Floor recommendation

Post: Reflecting on my first year house hacking a 3-flat in Chicago

Post: Best Way to Pull Money From These Properties

Post: The city is claiming my 4 unit is really a 3 unit. What should I do?