All Forum Posts by: Max Bellino

Hey Everyone,

I hope everyone is having a great holiday season! I’m looking for guidance on whether it’s worth opting for a rapid report for a cost segregation study, which is less expensive than a full site visit. What are the pros and cons? Does it still provide effective results? Also, can anyone recommend a reliable company for this? I’m planning to do this for 3 multifamily properties all located in MA, each ranging from 2 to 4 units. Any advice would be much appreciated! Thank you!

https://www.zillow.com/homedetails/15-Windle-Ave-North-Graft...

Hey Guys, 

I’m working on a deal that’s a bit complicated due to the subdivision of land, and I’m having trouble accurately comping the subdivided parcels. Does anyone have advice on how to approach this or know of a good broker specializing in vacant residential land?

Here’s my thinking so far: the property’s been on the market for over a year, and I know they had an offer for $500K. I’m considering coming in with an offer around $600K to $650K with seller financing and setting balloon payments once the land is sold. My goal is to get the single-family house and warehouse for around $400K, which would value the land at $250K across three lots. So after the land is sold have the last balloon payment to get a loan on the new lot with the less land. 

(Lot's are roughly going to be .5 of a acer in north Grafton Ma)

I do have a few concerns: one lot has a FEMA line running through it, two lots are next to a railway, and the terrain is hilly. I haven't toured the single-family home yet, but it likely needs work, and the warehouse would as well. I estimate the house could rent for $2.8K–$3K, while the warehouse might rent for (one unit) $2K–$4K, depending on how much work it needs to suit different tenants. So with another 100K in construction/fix up cost bringing the total to 500K it meets the 1% rule, obviously I would do more underwriting but I need to be solid on those comps.

Any thoughts or advice on this strategy? Or know anyone who specializes in land brokerage. Do you think it's worth my time to get this warehouse hack for free?

Best,

Bobo

 Hey Jim, 

I'm pretty local in the Worcester area. I have had good luck with Millbury National Bank, they are pretty old school and if they like your deal they will most likely lend at 15% down. The down side is the higher rate .5-2% above prime depending on deal and your financials. Good Luck, let me know if you would like to try a DSCR lender, I have two but unsure if they would do something like this.

Best,
Max   

Instead of suggesting that people give up, why not offer them help next time?

I get what Stuart is saying. If I ask different lawyers, I'll get different answers. But my problem is, sometimes when I tell them what other lawyers said, they tell me it's wrong (meaning on the legal side..nothing to do with stucture). That's why I'm trying to figure out who's right and who's wrong. I also understand now that making a holding company LLC in Delaware, like he said, is making things too complicated. Thanks for your input.

Could you please provide details on what knowledge I lack in asset protection and point out the specific areas where I may be mistaken? Thank you.

Yes, I agree with you. I've encountered misinformation from a couple of firms which is why I called it "shortcomings". When I talked about something I learned from one firm, another firm said that it was completely wrong, so this is why I'm trying to gather as much information as possible before making a decision. It's concerning to receive different answers from different firms because it's hard to know which one is right. As a client, I need to trust a service that I don't have much knowledge about.

For me, making the best decision is crucial. Collecting free but potentially inaccurate advice when I can only somewhat afford to pay hourly rates for an attorneys, some of whom may not even possess adequate knowledge, seems impractical. It's surprising to uncover the shortcomings of certain firms that lack genuine expertise. Perhaps I could be mistaken, but I believe diving into a relationship without fully comprehending it myself could result in unnecessary expenses if the relationship turns out to be wrong. Therefore, while I acknowledge the necessity of investing in a relationship, I want to gather as much information as possible and make the most informed decision possible.

10, but the emphasis lies in distributing the liability of the equity across the LLC's. I've come to realize that opting for a Delaware LLC might be unnecessary at this stage; it seems more fitting for the future when my portfolio experiences significant growth.

I believe that having multiple properties can enhance the performance of each property I own. For instance, if three of my properties are generating significant cash flow and performing well, they can offset any issues that may arise with another property, such as a heating system failure. By centralizing funds through a holding company and allocating them strategically within my portfolio, I can optimize its overall performance.

Moreover, leveraging the tax advantages of this arrangement can significantly simplify matters and yield greater benefits. Additionally, the lending opportunities that arise from banks assessing the equity of the entire portfolio as a cohesive entity are substantial. This holistic approach to portfolio management can yield massive advantages in terms of efficiency and financial leverage.

Furthermore, the liability shield provided by this structure could prove extremely advantageous.