All Forum Posts by: Kelly Wiggs

@Cody Duff I'm pretty sure its a base fee for preparation plus additional for more documents, but I've never actually asked. Last year I had 6 rentals, 3 flips and all those associated expenses & my personal stock and income, and it was about $300. I met with them about twice during the year for about 20 minutes each time and that is included in the preparation fee. I use John and he's top notch. They did sell last year and have added some additional accountants I think, but I haven't noticed any real changes. I would recommend.

Any recommendations for on where to find funds to rehab a 20 unit apartment building with an additional 10k of commercial attached located in Indiana? Tons of add value. Listed at 200k and I have the funds to purchase, estimated rehab at 150K-200k for apartments, ARV at 500-600k. Seller is motivated so I could be closer to 125-150k purchase price.

The plan would be to rehab and lease the apartment section first to generate cash flow. Then repeat with the commercial.

I could be in this for 300k if I had to and fund the purchase and rehab with cash, but I'd rather be in for 150-200k. Annual NOI would be in-between 67k and 90k on just the residential as lots of opportunity to increase rents in redeveloping area.

I have good credit, High DTI, Non Traditional Income, some cash reserves, 6 years residential rental and rehab experience

I'm talking to my Credit unit on Monday, but I wanted to reach out for alternative recommendations. Thanks for any guidance!

I'm working on a seller financed deal for 4 house and after reviewing the contract everything looks good except the following:

X. Changes and Alterations. Without the written consent of the SELLER first had and obtained:

A. Neither the purchased Real Estate nor any part thereof shall be removed, changed, remodeled, painted or altered in any way whatsoever; and

B. No additional improvements of any kind, including, but not limited to, outbuildings, fencing or landscaping shall be placed on the purchased Real Estate.

I sent the seller an email asking about it. Is this pretty typical in a contract sale? This is my first one. Part of the attractiveness of the deal is there is a lot of add value to the properties, and I could get a loan to get all my initial investment back out after the improvements. With this is sound like I have to ask before I do anything, correct? 

Thanks for the input everyone. I'm going to move forward for sure. I think I'm going to only put 30k down. I'll allocate the additional 10k for repairs. My realtor thinks they'll appraise around 55k after we spend 20k on the lot. He said I could move rents up another 50-100 per unit too. With those numbers I should be able to pull out most of my initial investment in about 2 years

@Hai Loc surprisingly no, solid C neighborhood. Just Owner bought 15 years ago at height of market. Lost tons of equity, used PM company that didn’t exactly meet his expectations when it was all said and done. He started out with more units, and these are the last of them. He’s ready to be done.  I self manage my units and handle a lot of the maintenance. It looks like a good situation for everyone.

I have the opportunity to purchase 4 houses on contract and was looking for input before pulling the trigger. The 4 houses are all on the same street, built in the 1930s, mechanicals function, however there will be some upcoming deferred maintenance. 2 of the house are currently rented; 1 new tenant 18 month lease, other just renewed for 12 months and has been there since 2016. The two vacant houses need about 5k to make ready. 

Seller said he would carry at 6% for 10 years with a ballon at 5 with following terms:

Purchase Price $131,600

Down Payment $30,000

Gross Monthly Rents $2,670

Monthly Payment $1,128

Taxes $317 month/$3,800 annual

Insurance $150 month/$1,800 annual

Balloon at 5 Year: $58,345

Plan is to rent all 4 and take to bank and pull out cash within 1-2 years to pay off seller. I think the numbers look pretty good. I'm considering asking him if he'll lower the rate to 5% if the down payment is $40,000. That would make the payment $972 and balloon $51,483. 

I'd appreciate any thoughts.

It's a great opportunity if you do it right and do it in the right zone. I'm closing next week on a commercial building located in an OZ where there's almost 80 million dollars of government & private development happening. My understanding is that you also have to improve the build(minus land) within 30 months by the same amount of the value at purchase to get the tax benefits. There's also usually some local grants and incentives if you look. The OZ I'm in the city has relaxed the zoning so it's much easier. There still another 3 commercial buildings in this OZ I'm considering purchasing, and I'm looking at the OZs in some nearby cities too.  

@Natalie Kolodij Thanks so much, am I correct that it has to be a partnership or corporation and not an LLC? I currently hold rentals in a single member LLC, and I know a new entity will have to be formed to qualify for the 90% rule. Will it have to be a corporation since I'm only 1 person? Does the entity have to be formed prior to the sale of the asset or will it qualify as long as it's formed and the property purchase is completed within 180 day? Thanks again!

There's a building I'm planning to purchase next week using the proceeds from the sales of stock. Has anyone done this? I have a meeting with my accountant next week to discuss, but I wanted to reach out and get feedback from anyone who's been through the process. My understanding is I have to form an entity that will hold 90% of its assets in an OZ, and it has to be a partnership or corporation not an LLC? The stock is held in my personal name. I didn't see rules for the proceeds from the sales of the asset; do the proceeds have to be held by an intermediary like in a 1031?

@Angela Ruggles We went with bookkeeping and more. Top notch work and very reasonable. 2019 will be year 3 with them.