All Forum Posts by: Kevin Mitchell

@Michael Plaks You really have me re-thinking this and for all the info, thank you. Mind sharing other financing options so maybe I could do all these deals with just my wife and I? I’m not familiar with private lending or where to start looking

@Michael Plaks

I feel so attacked by Mr Plaks haha

Additional info: by “we” I meant my wife and I. We have 6 cash flowing properties in our name and running like a German train station. They are quite successful via the cash flow multiples, lease terms, etc. Given my unique-tenants demand for me and my wife as a landlord the opportunity is too good not to move forward with the current requests for addition rental homes.

I bring an MBA, banking background, real estate experience, cash flow and some liquidity, etc. to the table vs my father bringing additional liquidity and capital. I need his capital.

I’m well aware of the horror stories about working with friends and families but I’m also aware of first hand success. The intent is to lay it all out of the table, upfront, and wrap it all up on paper with a nice bow. He knows I am bringing the tremendous opportunity and experience and he knows he is bringing the capital for which I currently need. We have 3 rentals to buy ASAP and 1 more on the docket for early next year; cue the unique situation.

My wife and I can do house #1 by ourselves with the capital we currently have. However, that will limit our ability to do houses 2 and 3. If we do house #1 and skip 2&3, then we could fund house #4 by ourselves. In order to continue to meet the demand and my commitment to my prospective tenants, I would rather have 51% of 4 houses vs. 100% of 2 houses, because there will be more after these initial 4 houses late next year.

Does this help? I'm simply looking for suggestions on the proper legal forms to research prior to meeting with a lawyer. Want to structure all aspects of the agreement between my wife and I (party #1) and my dad (party #2) at 51% us and 49% him. For example, party #1 will be liable for 51% of the debt, receive 51% of cash flow, pay for 51% of repairs etc. Probably most important piece is the decision making piece. My 51% should ensure that all final decisions involving business decisions should be approved by me. We will not have an LLC and will finance in our personal names together, in order to qualify for the type of financing with my current bank that will work for these deal

I am in a unique situation in which prospective tenants reach out to me to find them a place to live and rent. More unique than just that but for the sake of the conversation and questions I need answers on, the above summary should suffice. We have 6 cash flowing properties and my liquidity is quickly drying up. My father has noticed my success and wants a piece of the action.

With that being said, from a financing perspective we need to finance them in our personal names in order to utilize the type of financing we require to make these deals work. We both agree we want some type of contract between us outlining the details of our operation. Figured I would check here to see if there are known resources before we go the lawyer route. Would like to structure it 51% me 49% him to ensure all final decisions go thru me. Be it repairs, financing, etc. any thoughts? Happy to share more info if needed. Lmk what y’all think. Thanks in advance

@Jennifer Jackson Congrats on getting paid but I would document this situation of her late pay i.e. text messages and dates of when officially paid. That way down the road, and hopefully it doesn’t happen, you have more proof that she is habitually late. Set a strict policy and standard for late pays and notices and stick to it. I learned the hard way by thinking with compassion in lieu of reality. Good luck

@Michael Garofalo FYI- LLCs will absolutely limit your liability but from my experience it can limit your financing options as well. If I finance with my LLC I have a larger down payment and shorter amortization vs. longer am. And less of a down payment. Definitely be searching out a number of financial institutions and go with the one that can serve your immediate needs, keeping in mind they may not be the right option for your long term needs. Just my 2-cents

@Josh Johnson Sunflower Bank. PM me if you want more info

@Michael Henry

You could also increase your offer to align with the repair costs and require the seller to fund the Same amount in an escrow account to be used for said repairs. Submit receipts for work completed on repairs and title company would disburse accordingly

@Wayne Brooks I get 15% mortgages with PMI finances up front so there is not monthly PMI costs; which can limit cash flow. Rates are a little higher at 5.75% but my numbers end up working out great

@Rahul Handa Not familiar with Cali but I thin you are overeating. I would definitely work thru your due diligence prior to moving with regards to your next real estate “move.” Buy your primary residence with the intent of renting it out after a year or so. You could use minimal Down financing and lock in a historically low rate. Live in it for a year then rent it out. We did this after we got our first primary residence. Had to move a lot but after the first one we quickly acquired two more properties before our first year timer ran out. Happy to share additional info if needed. Fannie and Freddie from a conventional stand point will catch on to what you are doing after 2-3 moves in less than a year but it’s still doable. Good luck

@Gerard Gonzalez

Terrible rate indeed, but when me brick and mortar bank finishes my other HELOC later this month I too will essentially refi it. Definitely please with the speed of the cash disbursement. Needed to make a quick purchase of an investment property