All Forum Posts by: Lucas LeBlanc

@J-Ryan Stewart I think this is great as there is tons of potential in the short term market. I won't be able to make it to the meetup tomorrow as I won't be in town, but I would love to be a part of making this happen. 

We are looking for a CPA in the Tampa area that is well versed in real estate and business structure for tax implications in Florida.

As my fiancee and I start our real estate business in Tampa, we need some guidance on the best approach from a tax perspective. She currently has one business under her name and we are unfamiliar with the best way to structure everything.

Any recommendations would be greatly appreciated.

-Lucas & Jenna

@Adam Lovell My fiance and I are moving to Tampa in Q1 as well. Sending you a PM as it would be great to connect and brainstorm on how we are hitting the market.

Update: 

We just heard from the buyers realtor and apparently they are still willing to move forward despite the chimney issue, with the only contingency being we leave the house furnished. They apparently were very emotionally attached and the fact we had a back up offer certainly helped to force their hand a bit. I'll believe it when I see it in writing, but this is better news than we expected.

If this news is too good to be true, we will be following your suggestions of looking into the inspectors background/business, getting multiple estimates from engineers/chimney sweep companies/masonry contractors as well as come up with potential creative solutions to come to an agreement with the buyers.

If anyone wants any further details on how this turns out and the issues involved, feel free to reach out to me directly. 

Thank you everyone for your input, it is greatly appreciated and helped us wrap our heads around this situation!

- Lucas

@Patrick L. - Makes sense, and that is what we thought, but it was worth exploring this avenue in case there was some small chance it would work.

@Nick C. - That is an interesting thought as he would get a nice job out of it. From the way he was talking, it didn't sound like he also does the construction side. Definitely worth looking into though.

@JD Martin - We are hoping to come up with some sort of strategic compromise if we have to. Unfortunately our backs are against the wall a bit so our leverage and profit margin are thin at this point. I agree with your advice to not fix it ourselves and resort to concessions or go to our back up offer. We will find out soon what the buyers will ask for.

@Account Closed - The original inspector was a general home inspector, and the new one is specific to chimneys/fireplaces. So the new one probably holds more clout in this scenario. We looked over the original agreement, and there are a few lines in there for protection, but nothing that is incredibly concrete. The most impactful one is listed right under the chimney/fireplace area and says "We always recommend having a qualified chimney/fireplace inspector inspect all chimneys and fireplaces prior to escrow closing". It doesn't say anything about protecting him from giving acceptable grades on things that shouldn't have passed. 

Hi everyone,

We recently went under contract for a flip and are currently going through the inspection process. The chimney/fireplace inspection came back with major issues saying that it needs to be completely torn down and replaced, and that the price tag will be $25k+. When we purchased the home (6 months ago) we had a full home inspection done by a general home inspector, and he said the fireplace/chimney was up to code and just needed some mortar patched up. This has the potential to completely derail the sale or force us to significantly drop the price, which will put us in the negative for this flip.

We are waiting for the sellers to respond, but are wondering what our options are for possibly making an insurance claim against the original home inspector. Does anyone have any experience with a similar situation or any advice you can give us?

Thanks!

Lucas

@Mark Nolan Thank you for the detailed description! It is nice to see it put so clearly.

@Jeremy Paschedag They certainly provided a ton of good information quickly. It would be difficult not to do any of the work as we are big DIY people, but maybe we will run across a scenario that this makes sense at some point. If it becomes relevant in the future, I might reach out to learn more about your experience.

@Mike Reynolds Thanks for the input! My girlfriend already has a side business that will sustain us as we get this venture off the ground, so the income piece is not a concern. Good to know about the $50k loan option, even if that is less than I was wanting to use. Are there any restrictions on the use of those funds, or is there a penalty involved beyond the loan rate?

@Dmitriy Fomichenko Thank you for the thorough response! Glad to know this stuff now so we can plan accordingly for adequate funding from other sources. I agree on not cashing out my 401k as it is at a level that the penalties would be way too much to swallow.

My girlfriend and I are quitting our 9-5's to fully jump into real estate investing, but we have a few questions around funding that I'm looking for input on. We will be consulting a RE lawyer at some point, but I'm hoping for some early clarification as we put together our initial funding strategy.

We will be establishing an LLC focusing on flips as well as BRRR. We will be hiring GC's to do most of the work, but we will also get our hands dirty with DIY projects. We will start out by managing the rentals ourselves, and eventually outsource that to a management company as we scale.

Here are the scenarios that we would like feedback on:

1. Rolling our 401k's/IRA's into a Solo 401k under the LLC - would we be allowed to use these funds for the purchase or renovation costs if we do some of the renovations ourselves?

2. My parents have expressed interest in utilizing a self directed IRA that will act like a loan towards the purchase price of houses through our company, and we will provide a specific rate of return - are there any complications around this that we should be aware of?

3. Investments from friends that would be provided in the form of a loan (similar to #2, but not a SDIRA) - are there any solicitation issues here that would violate securities regulations?

Thanks for the help, and let me know if any clarification is needed!

Lucas