All Forum Posts by: Jon Fletcher

I've looked at two deals recently where the price seems fair on the surface. But the current rents are so low, that the deal only works as an all-cash purchase. Taking out a conventional 25-year mortgage, at 75% LTV, assuming 6% interest, results in a negative cash flow!

Have other investors run into this? What are your thoughts? My gut reaction is to walk away, but I'm getting FOMO that I may be missing the bigger picture. I intend to hold my properties for the long-term. 

 @Michael Plaks @Paul Moore this is really helpful, thank you. I understand the complication with proving that you're spending 40-hours a week on your W2 job and then 41 ADDITIONAL hours a week on my real estate work. Given that my W2 job is real estate development, would a work-around be if my employer were to change my employment status to an independent contractor? He pays my S-Corp, and then my S-Corp pays me. What are your thoughts? 

I'm not a lawyer but I'm familiar with large-scale real estate investors purchasing properties in the state of New York using a Delaware LLC. I've encountered that more frequently than not.

Personally, I had one experience where my Lender wanted the LLC to be within the state where the property was being purchased. But that only happened one time.

@Account Closed I'm looking at a couple of deals. I'd love to hear about what interest rates you're currently offering?

It astounds me how little people understand the Historic Tax Credits. It's a great program, especially for the Bigger Pockets community. Thanks for sharing these updates!

Interesting. Please keep us posted on what you learn! You can also sell tax credits which might be a more straight-forward option. 

Hi Rich, with regards setting up a partnership for the tax credits, a regular LLC will suffice. Are you looking for legal advice on how to structure the way the individual partners to the LLC will benefit from the tax credits? In my personal experience, each partner benefits from the credits proportionate to their ownership interest in the LLC that holds the property.

I don't believe Newburgh has any restrictions on STR's.

Paying off your investors in the future while staying in the deal yourself is something that you would want to discuss and arrange with your investors right at the offset. That arrangement should be reflected in your LLC Operating Agreement. Because your investors may want to stay in the deal and share in the same upside as you. And it may be difficult introduce this concept to them after X number of years, or they may simply not agree to it. It's always best to have a very clear business plan with your investors at the beginning so there are no surprises.

 The tax credit is incorporated into your tax return. So if you receive a tax refund, you could use that to pay down your permanent loan.