All Forum Posts by: Brant Richardson

     I just found out about a friend of the family who owns a duplex that he has lost interest in.  Apparently one side has sat vacant for about a year now.  He "can't sell it because he will owe too much in taxes."  He is done with real estate so 1031 would not be an option and I'm not sure why he doesn't just have a property management company run it.  I'm pretty sure he owns it outright at this point and  I am confident he will like the idea of reliable monthly income with out the headache of being the landlord.   I have personally just about maxed out my debt to income ratio for getting traditional loans, so owner financing is very attractive to me.  I think this could make a great win-win situation depending on how he is taxed.  When I talk to him I want to be very confident in my information, although he is a friend of the family I personally don't know him.  I would like to know exactly how he will be taxed with a owner financing type deal.

     My thought is that we would have a lawyer draw up a mortgage in which I give him a 10% down payment, hopefully with a 15 year term/amortization.  Would he be taxed on the 10% down payment plus the monthly payments the first year, then just taxed on my monthly payments for the next 14 years?  Is there a better strategy to use to minimize his taxes?  Different tax rates for the principal vs. the interest?

Thank you in advance for your time spent reading this and responding, 

                                                                                                                 Brant

Highly recommended for any out of state investors who are interested in the Kansas City market. I live in California and have been investing with William and Storybook Realty for just over 2 years now. We are currently working on my 6th investment property. Working with him allows me to negotiate for distressed properties on the MLS and rehab them, so the total cost comes in below market value. It's a much more trustable model than the traditional turnkey company that buys cheap properties for their own inventory then sells them to you for a profit. Property management has been great, I have had zero evictions and zero trashed properties.

William -  I hope to make it out to the summit so I can meet all the new members of your team.

Lenders I have spoken with usually say you cant do a cash out once you have 5 or more properties.  Do you have more than 4?

Another option would be a portfolio loan or business loan which would allow you to refinance multiple properties into one loan, usually at 70% of the value.

I was really afraid you were going to say you were hired by Grant Cordone.

Congrats on the new job.

Keep posting in the forums too.  You can fill in all the blanks you have been wondering about.

  With little or no money in the deal, I would be happy with anything over $100/mo cash flow, and that's with a 30 year loan.

Is there some reason you are using 20 year loans?  A 30 year will give you more cash flow and a better debt to income ratio for future loans.

Congrats on the deal and good luck with future purchases.

47.1k for $900/mo = awesome in my book.  You have repairs listed for 60 plus maintenance at 90, aren't those both the same expense?

I wouldn't really care about the $/sf. To me it would be all about the rent to purchase price ratio or the ROI. If you can actually keep those tiny units rented (they'd rent no problem where I live) then the property would be worth far more as a multi than a SFH.

Welcome to the forums Leo.  As far as asking questions goes, do it, don't worry if they seem like noob questions.  You are right that expensive markets are often better for flipping but you still have options.  Perhaps buy a duplex on the East Side, rent out half and live in the other side.  Some people also invest in rental units in another state, theres lots to read on that subject if you search the forums.

Read up on credit repair and get after that.

Owner financing is the quick fix which comes to mind.

Inner circle does not want to loan you money but what about partnering on a deal with you?  You each put in equal down payments, you find the deal and manage it, the loan is in their name.

It gets better.