All Forum Posts by: Lilly Fang

I can Refi it out, but I will not do so right now because, first, I don't need the money, and second, I hope the rate will be lower next year. Hopefully, I can get a HELOC on this later.

I bought it with 25% down a 7% mortgage, and right now, I have a positive cash flow. However, I would not have positive cash flow if I refi it out at 70%. It is just it is in California. You will see cash flow after probably two years: refi to a lower rate, (right now it's about 6.5%), and increase rent over time. I don't mind lose a few hundred dollars a month.

I bought it with a conventional mortgage at 25% down. The plan is to hold it for two years so that I can do a 1031 exchange to get a newer house closer to me, but if the tenants are good, I will do a cash-out refinance. 

It's a 3 bedroom, 2 bath, 1105 sf house in a B neighborhood.

Purchase price: $322k (Originally, my partner wanted to flip it with me, but I persuaded him to sell it to me. He earned quick money as a wholesaler, and I have a house to keep)

Rehab cost: $20k (vinyl floor, interior paint, new dual pane windows, new toilets and bathroom vanities, lights, new landscape, new AC condenser, all done by handyman, spent some extra money for minor plumbing and electric jobs, hydro jet sewer lines, clean up attic (had mice), added some insulation

Time spent: 3 weeks (two handymen for the first two weeks, one for the last week)

Value after repair: probably around $440k

Jobs still need to be done later: some dryrots, roof work (it's tile roof, roof doctor quoted me $9k, handyman said probably $5k, home inspector said $15k you can get a new shingle roof. I am waiting to see how bad it is and how good the tenant is to see if I am going to hold this house for a long term. If I am going to sell it, I will repair or replace the dry rots, paint exterior, and repair the roof. If I am going to hold it for a long time, then probably get a new roof.

Rent: the rent process was more stressful than I thought. After three weekends' of showing to about 15-20 groups of people, I decided to rent to a couple relocating back to California (credit it 580, lower than my required 650, but with parents as co-signer, parents have good jobs and own a house, and local in town). The rent is $2345+$50 pet fee excluding utilities. It was not an easy rent, considering I rented out my last house (well, 6 years ago) after only one show. I know this house has its problems (the master bedroom is too small). I will probably sell it after this couple moves out in 2 years to do 1031 exchange.

1, I just did a flip with a partner. He has an LLC, but I am an individual. The profit will be taxed at my personal tax rate.

What's the benefit of having an LLC to do flip? What I think is that the mileage and meals would become business costs to write off tax.\

2. What about BRRR? Is there any tax advantage to hold it under an LLC?

 Yes, I think this is the way I would like to do. It's just easier. Just don't know what risk this way has.

I will be a finance contributor partner in a JV flip. I will contribute money for buying and renovation, and the partner found the deal and will do management of the project, split is 50/50. My question is: is it safe for me to be just put a lien on the property, instead of put my name on the title?

This is the 2nd deal I do with my partner. On the first deal, my name was on the title, hold 50% of the property, but I found it's annoying to be on the title. Here is our first deal:

- We each hold 50/50 of the property on the title (I contributed 80% of downpayment, and he was supposed to contribute 20% to the downpayment, and we got a hard money loan)

- after we sold the property, I had to fill out the 539 form for withholding tax in CA.

- The partner brought in a cash contributor for his portion (let's say A, who got 50% of my partner's profit, basically 25% of the profit) to the deal and put a lien on the property. Escrow paid the lien off, the hard money loan, then the rest is our seller's payout. 

- I got my cash contribution back from the seller's payout, + 50% of the profit. A got 25% of the profit.

I like A's position better than putting myself on the title. Then I don't have to fill out 529 form for tax withholding. If we just put a lien or a deed of trust on the house. for example, a 300k house, 50k renovation. I will contribute 350k. I put 350k as a lien on this house, with draw schedule for renovation, get paid back of my 350k at close of escrow, then get paid 50% of the profit. 

I think this will make my tax filing easier. Is there any risk not putting myself on the title?

 Could you enlighten me on this?

Hi, I have a wholesaler approaching me with a subject to deal with. Here is the number:

take over $285000, 2.5% mortgage; $70,000 lien, 0%; $35,000 lien 9%;

My out-of-pocket expenses are $40,000, and my rent is $2500. The market value of this house is about $450k. What attracts me is the 2/5% mortgage takeover.

I asked if I would take over the title. The answer confused me. It sounds like the title will be transferred to a land trust, and my LLC or I personally will be the land trust beneficiary. I don't understand why I can't just use a normal title. Why land trust?

And he said I would pay the mortgage directly. I asked why the seller would sell the house this way. He said paying off the mortgage every month on time will help the seller fix her credit.

Am I missing anything? first time deal with subject to.

Thank you everyone. I am contacting my legal insurance.