All Forum Posts by: Logan Vierstra

See you Thursday! 

Last time was a lot of fun and very informative! I'm looking forward to the bus tour to catch up on local developments. See you Friday! 

So I have learned this lesson the hard way. The answer to your question is YES, there is a difference between what the city (Sioux Falls) will allow you to do yourself depending on whether you buy with an entity or your personal name. My partners and I bought a property with the intent to do a lot of the work ourselves, but we bought with an LLC.

Sioux Falls does issue permits to non-licensed homeowners who are residents. But, if they suspect you are buying it just to fix and sell they will require licensed contractors. Turned out for us, holding the property in our LLC was enough to make it so the city would not issue us homeowners permits and we had to hire licensed contractors for all the work that required permits. So if you want to do the work yourself you may be better off holding the property in your personal name.

Btw, it's not entirely accurate that just because you own something with an LLC that protects everything else you own. It does add a safety barrier, and it is generally worth doing, but if someone sues you they're going to come after whatever you own, they don't care how you own it. If you do the work yourself, make sure to pull permits and have everything inspected. If you hire contractors, make sure they're licensed and insured. If you do that you're relatively protected.

So I've got two rental properties. Both of them are held under the same LLC, and there are 3 owners total. (Me and two other guys). The properties and the LLC are in South Dakota. We have come to an agreement for one of the partners to buy out the other 2. It seems to me the easiest way to handle it would be for me and the other seller to transfer our ownership of the LLC into the buyers name.

What documents need to be filed for this?

What are some of the mistakes I should look out for in a transaction like this? 

Update: His threat for a lawsuit has reduced to a threat to take us to small claims for 1500. We are working out the refi and will either rent till spring or relist and just take what we can get and cut our losses.  

@Aaron JunckI agree, I think you guys are right that this guy is just kicking tires wasting our time. He walked the house twice before making an offer so he knew exactly what kinda shape it is in.

@David M. I believe the advice might have even come down from her broker. Once he threatened to get a lawyer involved I think she just wanted to make it obvious that we were making every effort to negotiate in good spirit, not 100% sure. Whatever the case we will certainly be going over the situation and be prepared for it in the future. 

Hey thanks for all the responses everyone! 

I should give a little more context. I don't think my agent is motivated by her commission being that she is my partner on the deal and is waiving her commission since she makes profit when we sell. We took a private loan out for the rehab and the time to pay it back has past so we are super motivated to just get this thing across the finish line. However, I'm not interested in playing games with this guy. 

The 50k in repairs he's asking for is all new windows and siding. (The house has 24 widows) Both are a little older but totally operable condition. 

Our contract became void this morning. We are most likely going to refi the property to pay the lender back and go from there. 

So I have a property that we just finished rehabbing and have listed on the market (Sioux Falls, SD) . We got into contract with an interested buyer and after the inspection he came back asking for us to do another 50k worth of work to the property. We said no. He started threating to get a lawyer involved claiming there were things we didn't disclose about the house, which is nonsense. 

Shouldn't we as the seller be able to back out of the contract at that point? 

My agent is saying we still technically have to negotiate with this guy, I'm just trying to get an understanding why. I understand that once he puts consideration down we are legally obligated to fulfill the contract. The part I don't understand is why we are still held to that contract if the guy presented us a counter after inspections. He's free to back out at that point if he chooses, why aren't we? 

I see a lot of people suggesting not to invest until you are out from under your debt or until you significantly increase your income. I don't exactly understand that. It seems like the exact opposite of the kind of suggestion I would usually expect to hear from BP community. I've heard it repeated a thousand times that a better paying job doesn't make you better off. Most people just up their lifestyle along with their income, and continue to live check to check. Seems to me learning to direct that money towards investments is a good idea. 
Instead of spending time working a second job, why not spend that time making money in real estate? In the latter situation you still make extra money and you gain experience.

As far as I'm concerned it's always the right time to invest. It's just a matter of paying attention and investing in correspondence to current market conditions, and according to your unique situation. 

I like your alternative plans, besides plan B. You came across a road block and you're trying to solve the problem, good on you. I'd say explore all these options. See what financing your wife could get. Talk to different types of lenders (hard money, private money, Flip Line of Credit lenders, commercial lenders, HELOC, etc.) and see what they think about your situation. Talking to other investors who have cash is a great idea also. I've done most of my deals using other people's cash, and I made money that I could have put towards student debt if I had debt.

Already got my tickets and my hotel booked! Looking forward to it!