All Forum Posts by: Joe G.

@Ellie Narie Have you looked into modular homes versus mobile homes? You can have the builder customize the floor plan and have the final plans for approvals prior to starting your project. This allows you to ensure that you will be able to obtain funding and comply with all local zoning / building laws. Modular can be just a tad more than mobile, but the construction and lead times allow you to break ground and be at use and occupancy in about a month for most projects. Also, if you are interested in building for cash flow, check out some of the companies that offer modular duplex. This way, the loan and local approvals will explicitly approve a multifamily on that property. Not an expert in this area, but I am reading about it as well for a multiplex project. Good Luck!

@Cody Deppen

I finally broke down and listened to it streaming from the BP site, but I had to restart it when I had to pause it getting in and out of the car. All good - great information - well worth the trouble. I was just attempting a lease option purchase the other day in order to not use a credit line. Great timing!

@Bret Kingcade

Sounds like your goal is cash flow. If that is what you are looking for, rework the math a few times to be sure it is correct and go with the flow.

Don't forget to include PMI in your FHA loan versus not paying it in the conventional. Also, ask your lender about PMI in the FHA loan after you have reached 80% LTV. Most modern FHA 3.5% loans continue PMI even after you go below the 80% LTV which means that cost will continue or you will have to pay for another loan to get rid of it.

You might want to also research which option has the most impact on your taxes as well. 

Also -- you might also discuss your future plans with your Dad and see if he is interested in a JV on a rental. Sounds like he believes in your ability and might be able to help you scale faster.

Here is a list from a search on find law to use as a starting point. Maybe a little research into which are specialists in Santa Clara zoning / land use. Good luck with your case!

https://lawyers.findlaw.com/lawyer/firm/land-use-z...

@Anthony Howell

Two things come to mind:

1) Calculate the cost of borrowing from the 401k versus other sources of capital to see what is cheaper.

2) Research into the terms of payback. I once borrowed from my 401k then was downsized from a corporate job during a buyout. I had to immediately repay all of the loan OR take it as an unqualified distribution (pay income tax and 10% penalty on total outstanding on loan). Which meant it would be cheaper to borrow elsewhere.

@Mindy Jensen Quick question: I listen through Google Play and this week's podcast didn't post on my android device as it usually does. Do you think this is a local error on my device or do I need to plan to listen in a different manner? Thanks!

I'm not familiar with California law. I search Google and found the following. It speaks about a three day waiting rather than a 5-day waiting. Not sure which is correct. I hope this helps you somehow.

It's from a state court site. 

https://www.google.com/url?sa=t&source=web&rct=j&url=http://www.courts.ca.gov/partners/documents/lthandouts.pdf&ved=2ahUKEwjF09yEiZjcAhWlct8KHb4XB34QFjAAegQIAxAB&usg=AOvVaw273JCuBUJ6doVbRV0iBU4q

@Conrad Legé

I am a fan of the 203k. All you have to do is put a property plan together than makes sense and follow it. Being able to purchase a property for 3.5% down (plus some closing), getting the funds to purchase and repair it, and having usually low rates locked in are great. There is a requirement for most FHA loans that you pay PMI even after you go below the 80% LTV. Ask you lender about it. Also, be prepared for the trip down the qualification paperwork trail it can be tedious at times. Don't over renovate for the area either -- that is a pitfall.

With that said, I currently purchased my personal SFH with a 203k, put 3.5% down and did a light renovation on a 20 year old house. I forced appreciation and am poised to sell at the 2 year mark in a couple of months for $20,000 more than I purchased it. Or I can rent it out with a tight cash flow or with a heavy downpayment for a lease option. This means I put $7200 cash to get $20,000 or more in two years.

In addition, my FHA loan is assumable to a qualified buyer. This means that I can sell it for what is owed and then carry the note for the forced appreciation. In addition, if interest rates continue to rise -- I can actually market the loan as part of the sale for the locked in low rate 4.5% that is currently at 5.4% with two rises expected this year!

@Justin Michael Johnson

I have been in several partnerships with life-long friends. Varied results; all stressfull. First, be sure that you goals are actually the same goals. If they are not -- that is ok. Maybe you want to partner on several deals but also be allowed to have other business on the side for yourselves. In your business agreement, there should be goals. One of them should be "To always remain life-long friends". You must make that as part of your "WHY" or you risk losing each other in the process. Losses in your business are hard enough, but if you have business and personal losses at the same time -- it can be crushing and have a lasting effect on your business success. 

My suggestion is to ensure that the operating agreement (assuming LLC) is very specific about who is responsible for doing what actions. It is imperative that if anyone is taking money from the business - they are held accountable by basing payments on performance rather than hours. If only one person is accountable for sales there will be stress when numbers are not met. To be truely successful you must commit to both of you being persistant in the game together 110% of the time. 

In a true partnership, if one fails, all have failed and it is everyone's fault. Don't assign blame, don't have anger, take responsibility for both of your actions, move along with that in mind. 

Finally, make an exit plan in the event one of you want to leave and an exit plan in the event something terrible happens to one of you. Who gets that guys portion? The business or families?

Good Luck!

@Nick Thurston

Do you have a background in sales or real estate? If you don't, I suggest you find a large broker in your area that provides free training and mentoring support from a broker. Expect a 50/50 or close to it for this training and support. You can negotiate up as you close more deals or switch brokers if you think the split will outweigh the branding. Giving half of everything might seem like a lot until you realize 50% of a lot is more than 0% of nearly nothing.

Always hang your license somewhere people know and respect then find someone in the office that will take you under their wing for a few deals. Offer to sit at the desk and do open houses. If the caller or open house visitor are not represented, you must close the deal to represent them otherwise you are working for free. Even if they are represented and your broker allows it -- get their email and start building a book of business.

#WillWork4Leads

Keeping accurate records of items that you can write off while or depreciate if key. It is a pain in the ***, but keep meticulous records for your CPA to offset first year costs and self-employment tax.

Good luck Nick!!!