All Forum Posts by: Justin Sandall

Hey guys,

I've heard E-Myth recommended multiple times on the podcast so went to amazon to purchase it. I came across a very recently released E-Myth book titled The E-Myth Real Estate Investor (http://www.amazon.com/E-Myth-Real-Estate-Investor/...).

It's the same author, was wondering if anybody had read this new version directed toward REI??

Thanks for the reply Brent.

The expenses are all estimated (likely overestimated) and the comps in the area seem to be consistent with a FMV of $65,000, thus I took 20% off that. I certainly could start at even more of a discount. I think the $100/mo of cash flow is near worst case scenario, in reality I expect it will be more (as has been the case with our other property). I try to overestimate expenses in my deal analysis.

I certainly would like more cash flow and could probably get a rent of $900 rather than the $850 used above. I probably won't have more to put down; are there any creative financing options that could be a good fit? 

Hi all, We are closing in our 2nd SFR in 1 week; all of my available investment capital is being used for down payment/cc for that deal. However, I've come across another property that I'd like to run by you for your opinions on how I may get it financed. 3 bed/2 ba, 1800 sq ft, single carport, appliances stay, lg fenced yard Motivated seller List: $64,900 Discount: 20% ($13,000) Purchase: $52,000 Percent down: 5% Down payment: 2,600 Make ready repairs: $11,000 Amount Financed: $60,400, 30 yr, 5% Monthly mortgage: $324.24 Monthly rent: $850 (median for area is $900) Vacancy: 10% Monthly NRI: $765 Monthly Expenses PM: $85 Leasing costs: $35.42 CapEx: $38.25 Utilities: $25.00 Property taxes: $108.33 Insurance: $27.08 Maintenance reserve/other: $20.83 Total: $339.92 NOI: $425.08/mo Mortgage payment: $324.24/mo Net Cash Flow: $100.84/mo Annual cash flow: $1210.12 Annual debt paydown: $891.00 CoC return: 47% Total return (excludes appreciation): 81% I had to make some assumptions as I don't know how much, if any, I would have for a down payment, I'm not sure what interest rate I'd have depending if I went conventional vs seller financing vs etc. Thoughts on potential ways to make this happen if I don't have money to bring to the table or don't want to pursue a conventional loan? I'm a total newb when it comes to creative financing! Is it ok to have my agent contact the seller's agent to inquire about their openness to alternate financing options? Thanks for your time!

I'm rather crude at Excel so I'm trying not to reinvent the wheel if possible. I do want/need a way to track the performance of my properties - I have analysis spreadsheets that spit out projections but I need to no what reality is. Have any of you used this spreadsheet http://www.reandfinance.com/real-estate-spreadsheet/ ?? I'm willing to pay a little if it is good and saves me time. Thanks again.

I'm finishing up The Millionaire Real Estate Investor - great book, so happy that so many of you have recommended it. I'm in the process of setting up an excel spreadsheet with which to track returns, both ROI and ROE along w debt paydown, cash flow, equity accumulation etc. Does anyone know if a version from his book already exists online that could be downloaded? If not, do you have any that you'd recommend? Currently, I don't include appreciation of the property or rent in my calculations. I'm not sure how important that is, but I've really no clue how to go about figuring out what those rates are. Any insight? Thanks for your time!

Everyone,

Thanks for the awesome replies! Both sides of the coin are represented well here. It will make for a good discussion with the other partners. Thanks again!

Originally posted by @Bill Gulley:

Justin, this can be more complicated than you think initially. How many members are in your LLC? More than 3 can present issues as to investing and business purpose. Next, if the LLC is not the owner of the property it is managing real estate, any license requirement for managing properties held by others? Probably so, and the number of members may influence license requirements.

You are correct about the due on sale issues, it is a risk. I doubt you're getting a secondary market non-owner occupied loan with several on title, so what is the issue with the LLC obtaining the financing with a personal guarantee? That is the better and more acceptable way, may be your banker needs to be educated and if they can't do it, look for those who can.

I really suggest you guys belly up and see an attorney to structure your arrangement. Good luck :)

 Hi Bill,

Thanks for the reply. Definitely some stuff I had never considered. I was planning on a meeting with the lawyer soon, will see what he says!

We are nearing the end of our first year lease on a SFR and trying to decide whether or not to increase the rent for the coming year. I've read that you typically increase ~3% annually but we are hesitant as we are near the higher end (but still wiggle room) of rents for our area and have had a great tenant who we don't want to lose. How do you guys decide whether or not to increase rent?

Any thoughts? Do we put ourselves at risk by holding the loans in our personal names or does the use of the LLC for all the business transactions protect us somewhat? Or, maybe it just doesn't matter.

We are preparing to close on our second investment property (SFR) in the next month. Like the first, in order to secure financing with a competitive interest rate and 20% down, we put the loans in the names of the LLC partners. Putting it in the name of the LLC was not feasible.

The LLC receives all the tenant checks, pays all the expenses including the mortgage, has separate savings and checking accounts etc. Other than the mortgage, there really isn't much in the names of the partners.

Is this an acceptable way to do things? Any issues with it? 

Part of me is tempted to try to transfer the title and mortgage to the LLC but I know I risk triggering the Due on Sale clause. It could make things more simple (if no issues with the clause) and keep us from running into the issue with number of property loans per person I've read about.

Thoughts?

Thanks for your time.