All Forum Posts by: Jon Mason

Seems like a whole podcast could be devoted to the ethics of real estate investing. How do we make it a very unfriendly environment for people who would take advantage of other investors and/or tenants? The article is extremely disturbing for a variety of reasons. We have a responsibility to demonstrate through our actions and interactions who real estate investors truly are, and situations like this are a collective black eye on us all.

@Shane Craig I don’t ever hear Avail mentioned on these forums, but we’ve switched from Cozy to Avail and it’s great. They have a feature where they report rent payments to the credit bureaus, so it incentivizes your tenants to pay on time. It’s doubly effective because a late payment gets reported as well. We have tenants who are trying to repair their credit and I think this has been a big motivator and makes my life much easier.

@John K. I think it could be a good option for them as they’ve owned the property for years and left it vacant. They only want to rent it now as they’re wanting to get a little money coming in each month.

The house definitely doesn’t need a ton of repairs, but it’s also not 100% retail ready and they live in another state, so selling it traditionally would be inconvenient at best.

That’s a great point about the cost of selling it traditionally. I’ll be sure to highlight that as well.

I have some questions about structuring a seller financing offer.

1) Can you offer the seller a certain monthly payment that makes the property work with the rent it will command, or is it typically something you just plug into a mortgage calculator and the payment is based on the down payment, term, and the total loan amount?

2) I know a couple of benefits for the seller, like getting full asking price and having lower taxes on the money the get, but are there any other benefits?

3) does this typically work for properties that don’t need a bunch of work?

I know some people who live out of state and they have a vacant property that is mostly or completely paid off. They are wanting some monthly money coming in and were thinking about renting it, but they don’t want to manage it and want us to manage the property for them. I was thinking of putting together some scenarios that may work for a seller financing offer and see if they’d be interested. Any advice you can provide on how to make this an appealing deal would be greatly appreciated!

Thanks!

@Eamonn McElroy yeah I read up a bit on the family exemption, but I don’t think we would qualify. Perhaps there are others we could look into as well.

@Brian Boyd good feedback here. Any insights on the Series LLC and if that would be worth pursuing?

Just discovered this question, which has some good feedback on it: 

https://www.biggerpockets.com/forums/109/topics/682825-general-partnership-or-llc

If anyone has any other insights that might be different for TN, then please chime in.

For purchasing properties (buy and hold) with a business partner (not my spouse) is a general partnership or an LLC the better choice?

I've always thought an LLC was the way to go, but we were chatting with a lawyer and they mentioned that an LLC would cause us to have to pay Franchise and Excise Tax of 6.5% plus an additional $2500 for every $1M in equity. They advised us to consider a General Partnership with an insurance policy instead. We are in Tennessee.

I've read that in a GP, you are unable to take advantage of depreciation if you are involved in the management or operation of rental properties, so that would be a pretty big hit depending on how that works in practice.

What is the best business structure for minimizing personal risk and maximizing the tax benefits of owning real estate?

Thanks for any help you can provide!

I don't know about Canada, but we purchase rental reports from Cozy. They're like $20 and gives you a lot of detail on what nearby homes are renting for. The best part is it's based on what properties are actually renting for, not just what they're listed for. Paying for this one report will make me over $2,000 this year, as I was able to rent a property for $175 more per month than what I had planned using tools like zillow, craigslist, and rentometer.

I'm looking for #2 in this article: https://www.biggerpockets.com/blog/2015-01-14-types-general-contractors-how-to-choose

I've got a couple of #1 (small-one man contractors) who I'd consider more handymen than anything, and they're fine, but I need someone who can come into a house and give me an estimate for the entire rehab, and then has the team to get it done.

Essentially, a mid-size GC who is doing some of the work themselves but has a crew of 4-8 people. What is the best way to go about finding these folks in my area? Some obvious methods would be REIA meetings and personal recommendations, but what are some other ways? Would home advisor be an option?

Thanks in advance for your help!