All Forum Posts by: John Hill

I’m structuring a seller financing deal and I have a question.

I’m the buyer in this deal. I’m using a title company to close and a servicing company for the servicing of this loan.

Question, what if during the life of the contract my seller defaults on a personal loan and that lender attempts to attach a lien to the property that he has seller financed with me.

Questions that come to mind (some are elementary but I don’t want anything left to assumptions).

1. Can a lender that he has a private financial relationship with, attach to the home that he and I will have financed?

2. Can I protect against this?

3. Does anyone have any experience with this?

4. Of this does happen, what is my recourse?

If there is anything else regarding this topic you can shed perspective on, please share!!

Thank you BP :)

John

@Jeff B. your reply would be relavant if this was a performing property; however, as stated it's new construction. Do you have perspective on new construction financing?

Thanks Jeff..

Thank you for responding @Account Closed 

They are wanting me to cover P&I on the project personally in order to get financing for construction. They are not giving me credit for occupancy. This is a new construction project so there is no rent roll. Covering debt on 2 million personally is tough. It would be nice to get at least some credit for occupancy, maybe even 30-40%. 

John

Is it common for banks not to consider revenue on a new construction multi-plex? I'm looking to finance student housing in the form of 2x30 unit complexes. Total cost of construction 2mil. The bank is telling me that I would have to cover 100% of debt service. Even at a 25% occupancy I can cover. 1.5 DSCR.

Please advise..

Thank you!

ok and you got 4 successful investors providing you the very same answer, don't pay down debt!

If your looking to grow then don't pay off any of them! Leverage the low rates and use the cash to invest in other properties. Paying mortgage debt in full avoids your ability to claim interest as a deduction and banks will never allow you to leverage 100% of your equity in the homes... In reality you will be lucky to borrow 80% and even than, think of the hassle of dealing with a mortgage broker or bank on a refi...

Just my 2 sense. Keep in mind that there are a million ways to crack the nuts of real estate investing...

John

Wondering if anyone has experience with this. Here's the scenario:

My mom has an IRA and we have talked about her becoming involved in investing in my ventures. We have recently spoken about moving a portion of her IRA to an SDIRA and buying a property threw the SDIRA.

My question is:

If she purchases the property with SDIRA funds can I be paid (personally or my LLC) for work done on the property in order to flip it.

Please advise!

John

I was wondering about that. I'll run this across my CPA. What if it wasn't to me personally but to an LLC I have? @David O. @David Tyrell

Thanks guys!

John

Wondering if anyone has experience with this. Here's the scenario:

My mom has an IRA and we have talked about her becoming involved in investing in my ventures. We have recently spoken about moving a portion of her IRA to a SDIRA and having her invest with me using a promissory note as the instrument. I would then use the money to buy a property I'm currently interested in and using the BRRR strategy, pay the note in full.

My questions are:

1. Is this possible?

2. Do we agree upon terms and simply draw them up in a preformatted document? I'm assuming the Dealer Broker would supply the note and we would complete the terms.

3. Does anyone have a suggestion for a Broker that deals in SDIRA's and is cheap?

4. Is there more to this that I'm not seeing?

I contemplated buying the property with her SDIRA but in talking with her she is not interested in partnering to that extent (i.e she doesn't want to own property)

Please advise!

John

@Scott Snow I'd definitely be willing to work with you. I currently have 4 SFR that I rent in SLC plus a 10plex ready to close next week. I would be willing to share my insight, knowledge and strategy for a little insight into the commercial and SBA world. My wife is a real estate agent and I'm currently on my 15th year in the military. If you have time to meet at a local beans and brews I'd be available.