All Forum Posts by: Justin Hroch

@Michael Plaks thanks a ton for the advice and caution. This is what I was thinking but wanted to at least get a few other opinions.

Hi,

I have an opportunity to purchase a few duplexes via seller financing. I am in the process of conversations with the seller and I want to show them some of the benefits of an arrangement like this. My question is concerning tax liabilities the seller might incur by transferring title but holding the note. 

I know in a typical sell it triggers a tax liability for the seller. Is there any tax liability that happens when the seller holds the note on the property? Is it just the principal and interest paid during the year?

I am buying small multi-family properties. Currently I have a 4-plex and a duplex with one partner (Partner A) and I am under contract with another duplex but plan to buy it with a different partner. (Partner B) 

The two properties bought with Partner A are in an LLC and my intentions were to start another LLC with Partner B. I am great at finding deals and bringing along other partners to help fund them.

My question is do I have to start a new LLC with each partner or is there an easier way to structure this? My fear is having 15 different LLCs!

Any advice would be appreciated!

I am a realtor and there are times that I feel there can be a lack of transparency and alignment in a real estate transaction between the two parties. I feel this around multiple offer situations and seller disclosure. I am curious if others feel this and what parts of the transaction lack transparency or alignment between parties. 

I would love to hear others thoughts!

Joseph - we had tossed that idea around. I think I start projecting on what people would be willing to lend. It seems like we would be getting the better end of the deal, but I guess that is relative to the investors goals. Thanks for the thoughts!

I am closing on a plot of land that has two existing structures and the ability to subdivide the remaining land into two additional lots. Our plan is to BRRRR the existing structures. With the additional lots, we would like to build a duplex on each.

We are purchasing it with hard money 90/10 on the purchase with 100% in rehab for the existing structures. Generally, my partner and I bring in GAP investors who have an equitable interest in the profits once we sell the property. Since our intention is to buy and hold these, but will still need the GAP investors to close the deal, I am wonder what are creative ways to structure the investment and what percent equity would you give an investor in a long term buy and hold property?

Open to any resources you would recommend as well!

@Wei Cho welcome almost to Austin! It really is a great city with an awesome vibe and it also is a great place for investors. Here’s a couple of things I would point out:

1. I think you are thinking in the right direction concerning house hacking. Austin has become a really expensive market and it is really hard to find properties that cash flow. Some measure of house hacking is going to help you get the right type of financing. Not sure if you listen to episode 392 with Todd Baldwin, but I would check it out. It’s a very intriguing strategy you might consider.

2. Not sure what your appetite for flipping is, but there is a lot of money to be made in the fix & flips here. What was once the suburbs of Austin has now become the city center. You have a lot of aging homes that need repair. This is also why you see such a disparity in price right next door to each other. Unfortunately, with flipping comes the City of Austin and it can be quite cumbersome to navigate.

I would love to connect with you guys when you move to the area! Good luck wrapping up the project in LA!

Investment Info:

Single-family residence fix & flip investment in Austin.

Purchase price: $272,000
Cash invested: $185,000
Sale price: $620,000

This was a project where we took a smaller home and added around 1,100 sqft. Austin, TX is a very hot market and it has made it very hard to find deals with significant margin by simply doing an interior remodel.