All Forum Posts by: Kathy Moser

Hi Amazing Investors!  

I am in the process of negotiating an installment sale contract for 3 houses, one of which will be my primary residence.  The houses are not currently mortgagable but those issues are resolvable over time.   The owner wants to sell soon so we are starting the deal with seller financing.  

I want to form an LLC for the 2 investment properties so that I can buy the primary residence with a conventional loan without the investment properties affecting my credit score or DTI ratio. If I do a solo LLC it will appear on my 1040 and it is considered a "disregarded entity" in my state. I could do an S corporation instead or have the LLC considered as an S corp.

Any experience with issue would be greatly appreciated.  Thanks!

While explaining why he was rejecting my first offer the seller also mentioned his young daughters wanting Corgis but that they already had 2 dogs.    A recent BP podcast was on giftology, especially gifts for the family.This is what my second offer looked like.

My first offer was presented in a binder with table of contents, including offer, proof of funds, tax return, credit score, rental and "as is" comps, rental and refi calculations, business plan and more.  They rejected it but there's no way they didn't think it was a serious offer.

Also thanks to BP and the rookies boot camp I made 2 offers this time, giving better terms to the one I wanted.Two meticulously researched, thoughtfully crafted offers I worked on with my lawyer and realtor. First offer he rejected immediately saying it was too low by half. This offer he sent a text full of exclamation points thanking me for the gifts and saying he wanted a few days to digest my new offers. Definitely progress!

Hi Bill, thank you so much for taking the time to make a detailed and thoughtful response based on your extensive experience.

I'm a rookie and I'm using the numbers from Bigger Pockets podcasts and Rookie Boot Camp I'm in.  It's actually a 3 house deal and all the houses need work.  My concern is that once tenants are in more issues may come up.  

The houses have been vacant because the tenant was evicted and shortly after the owner died unexpectedly without a will.  The family member who is dealing with it was not expecting to have to and then there was covid.

My offer was rejected partly because the seller does not account for cap ex, repairs, vacancy and management.

The homes show that actually but I can't think of a polite way to say that.

Without accounting for them the cash flow looks higher, if you do account for them it loses money at the price they want.

I gave them the deal analysis from BP to make my case.Any thoughts on how to work with this? 

The door is not shut on making another offer but the houses are going to have issues because they have not been maintained and they have been vacant for over a year.

Thanks!

Just wanted to share and thank everyone for their support.  I'd didn't think at first I'd be one of the ones to make an offer during the boot camp but I dropped it off today!

Super organized binder but my office is trashed!

Here's hoping this is my forever home!

anyone else having this issue or have a fix?  I want to use this to make an offer and it is just weird when all the numbers end in 97, thanks!

I have the opportunity to purchase 3 houses in an off market deal.  They will only sell them as a group and they've offered seller financing.  

All 3 houses need work, including septics, which will run $35,000 - $45,000 per house, plus at least $10,000 more work per house.  So at least $175,000 in improvements, which would have to be cash out of pocket.  Bank financing is not an option for a variety of reasons.  I don't have enough cash to do the 15% down payment, all the repairs and have a 3-6 month reserve.  

Here's the offer I want to make:

I'll purchase house #1 for cash and do all the upgrades, refi in a year and use that to buy House #2, and do it one more time to buy house #3.  

In the two year period I will also find and screen tenants and act as property manager (they don't want to be landlords) in return for 10 - 15% of the rents to go into a fund to go towards the next house.

I want to create a deal where they have confidence I am going to buy all 3 and I am not over extended.  

Has anyone done a deal like this?

Thoughts?  Thanks!

Thank you Simon for taking the time to reply!

Hi All,

I'm going to need to do a bunch of legal and inspection work prior to buying a multi home project.  It could run up to $10,000.  

I was wondering if it makes sense to form an LLC now so that I can pay all these costs through it and write them off against the income? Its an off market deal, likely doing seller financing. I need to do some title research and have a lawyer determine if the HOA's legal status is sound.

I want to do all this due diligence ahead of time because I'd rather spend that money than do the deal and find out the HOA is solid. The tax benefits of the HOA would more than pay for the legal fees in the first year.

Thanks!

Hi All,

Can anyone recommend a lawyer who has experience in land-lease and HOA's? I'm doing a deal in Morris County, NJ and am having trouble finding a lawyer who has this expertise. Thank you.!