All Forum Posts by: Matt Vogt

Assuming you don't live in one of the units, you'll likely only be able to go up to a 75% LTV on a MF.... or at least that's all I've been able to find while talking to lenders and researching online.

Is this going to be a flip? Can you find a private money lender to loan you the funds on a short term basis at a higher rate? You're possibly better off paying the higher rate for a few months and avoiding the mortgage origination costs.

So the asbestos is likely on the tile adhesive. It's generally dangerous when it's in dust form, so probably what I would do is buy an asbestos mask for 40 bucks, tear up the section you need to access the pipe. After the plumbing is repaired, then probably just tear up the remaining tiles and lay something new on top. 

REIT's are available on exchange markets... much like what you're suggesting, however they have a larger portfolio of holdings (think diversification) so that your downside risk is mitigated slightly. I would go with a REIT over some private deal like you're describing.

No, you don't "need" them. I absolutely would have them though. The reason you have gutters is to catch the rain and channel it away from your foundation. If you have seen a house with a crumbling foundation, it's usually caused by poor drainage and/or sloping of the landscape. 5K for gutters vs 30K of foundation repairs seems to make for an easy choice.

I don't see a single positive besides being period correct if it's a Victorian mansion or something where the buyers would want an authentic period correct home (very small niche market). If it's a normal house, you'd be better off IMO to go with central heating and cooling. Radiators are hot to touch, not great for kids, clank and bang when warming up. There's a reason new places have radiant floor heating or at a minimum whole house HVAC. If you're putting in AC, get rid of the radiators and do a furnace. You might find someone who likes radiators, but 95% of people want modern amenities. Additionally, you have less risk of an old pipe rusting out and causing water damage down the line... there's no risk of that with central air/heat.

Do they have employment here in the states, are they students, what is their situation? I'd start by asking simple questions like that and use a gut check. Also, if you're not totally comfortable, take a larger security deposit, 1st and last months rent, and do a month-to-month lease for the first few months or so to see how they are. 

Are you looking for an ARV? A good bet would be to look at Price/sqft of houses with similar finishes to what you're planning with around the same size footprint and lot size. Get on the MLS, Zillow, Trulia etc and see what things have sold for recently. It's probably not a bad idea to network and find an agent you like. You're better off having someone on your side, especially when you're green.

An LLC is really there for asset protection. It's a pass-through entity so I'm not sure what tax benefits you could gain. Usually people have an LLC to minimize their downside risk in the event of a lawsuit or bad business deal.

Imagine you have a 100K property, are grossly negligent, a child dies and you get sued (and lose) a 3M lawsuit. Your LLC goes bankrupt, you lose your 100K property.

Now imagine the same situation without an LLC. You get sued and lose a 3M lawsuit. You have a 1M umbrella insurance policy that covers the first 1M. They then take your property, your primary residence, garnish your wages, etc. to attempt to recover the additional 2M.

Under the LLC, your downside risk is substantially minimized (assuming you don't pierce the corporate veil).

From a tax perspective, the LLC is a pass through, meaning that your taxed the same as you would if it were held as a sole-proprietor. In fact, the LLC is going to cost more to setup (mine was around 1K in legal fees), and you'll have additional tax costs for preparation (~500/yr for a simple 1 property LLC). You'll also need separate bank accounts, separate accounting books etc. If you were to not hold it as an LLC, your expenses could still be deducted to offset the revenue, so as I said, no tax benefits to the LLC, although it may help to keep your dealings more professional and make it easier to track.

I like the LLC model, as your downside risk is substantially mitigated if you are doing things properly. It's simply keeping your eggs separate. Good luck.

The point of the 1031 exchange is to protect the profits from the investment you're relinquishing. It's not going to matter how you allocate that 50K, either way it should be protected from taxes which is the entire point of the 1031. Someone please correct me if I'm wrong.