All Forum Posts by: Jorge Esteban Vargas

@Tim Delaney Spoke to my lender and he recommended this option! Appreciate everyone's input!

I created an LLC for all my real estate affairs. Lately, I've been thinking about purchasing a new investment property with a friend of mine. However, we had no time to properly create a Limited Partnership because we randomly found a potential property and our realtor sent an offer to the seller there's a chance the seller chooses our offer. Because at first I wanted to purchase the property by myself, my LLC was going to be in the title of the property by using a hard money loan. However, it now seems that I may need more money to and a friend of mine is willing to invest some money. Are we allowed to have my LLC be the "owner" property and then have a written statement stating that we'll split profit 50/50 and if we were to sell the property, proceeds would be split 50/50 as well.

I'm about to consult with an attorney but wanted to get input from this community as well. My wife and I own an investment property in Forest Park, GA. We want to turn our SFR into a duplex by building an additional unit. We're close to finding a partner and are willing to make them 1/3 owners of the whole property once the construction project is completed under 2 specific conditions:

1. They would only get half the profit of the new-constructed unit. Right now, the property is ~1,200sqft and the new unit would be about 960 sqft making the overall property ~2,160 sqft. 

2.If we decide to sell the whole property in the future, then they'll get 1/3 of the proceeds.

My question is should we change the deed to make them 1/3 owners of the property and then have an attorney write a detailed agreement or can we simply have the detailed agreement state they're 1/3 owners and will get half of the profit of the new unit?

For tax purposes, will they be able to use depreciation if they're NOT in the deed?

@Mike Wood I checked zoning and we are allowed to have a duplex and/or boarding house, the only rule is the property can't be more than 30% of the lot which means the second unit can be ~1,800sqft. I'm guessing it'll be better to have the unit attached to the primary home to save some money and I may have to get creative to find $120K- $150K for the construction cost and then I can refinance using DSCR loan.

Hello everybody, we have a 5bed/3bath single-family investment property in Forest Park, GA and my wife and I know that our zoning area allows duplexes. Since we have some land behind our property, we're thinking about converting the house into a duplex by building a second unit in the back. Does anybody know of any lenders that will work for this specific type of project? I spoke with a hard money lender but they'd lend to only experienced flippers. Here's some additional info: we rent each room individually and have been doing great and people always ask if we have any additional houses/rooms in the area so we would love the second unit to be either 4beds/2baths or 6 beds/3baths.

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $145,000
Cash invested: $74,750

Bought this as primary residence with ~$27K out of pocket ($8K in closing costs & down payment and $19K in fixing the property) and decided to house hack it since day 1; a year later we moved out and completed a $48K renovation project which turned the property from 3bed/2bth to 5bed/3bath. Since we're renting each room individually, we're cashflowing more than usual.

What made you interested in investing in this type of deal?

We knew plenty of folks in South Atlanta are always looking to rent a room.

How did you finance this deal?

To purchase the property, conventional loan ($8,200 for closing costs and 3% down payment), we then paid $19K cash to fix the property. Then a year later, we added 2 rooms and a full bathroom for $48K using a personal loan with a term of 5 years.

How did you add value to the deal?

$48K renovation project where we added 2 bedrooms and a full bathroom.

What was the outcome?

Before the $48K renovation, property was cashflowing ~ $600 a month, now it's cashflowing ~$1,000 a month and value of property increased from 145,000 (purchase price in 2021) to $220,000 (re-appraised in 2023).

 There are several ways to get funding. Here's a couple that might work for you:

1. Regular conventional investment loan which requires 20-25% down payment and you'll be qualified depending on your current income (they won't take into account the potential rental income from your new investment)

2. Fix & flip loan using a HML (hard money lender): down payment will vary depending on each lender - might be 10% if you have a good relationship with them or 15-25%. This is a good option if you're trying to fix the property and don't have all the money for the renovation since the HML lender will lend you the money for both purchase and rehab. This type of loan will take into account your credit score only for the interest rate, they won't ask for pay stubs since they just focus on the value of the property itself rather than your income.

3. DSCR loan: this type of loan takes into account the market rental value of the property rather than your personal income. Also requires 20-25% down payment.

hello guys, I'm a newbie living in Atlanta and I have a question for experienced investors:

When you first started in real estate and you saw a property, how did you calculate how much the repair costs would be? I don't work in the construction industry and have thought about bringing a contractor to see properties with me just to get a quick estimate but as you all know, contractors are very busy nowadays and I feel like sometimes I see a house that I just want to see the same day but then if I don't know how much a repair could be, what kind of solutions would you all recommend? Any insight would be greatly appreciated.