All Forum Posts by: Melvin Maxwell

You can definitely do it during the due diligence phase; put the offer in and get it accepted.  Then do the inspection and once you fully understand the repairs you have on your hands, you can use your inspection report to ask for price reduction if you believe it is warranted.  Just because they say they are selling it as-is, doesn't mean they won't give a price reduction later.

Hi @Adrienne Binder

The primary purpose of an LLC is for asset protection--ensuring if something goes wrong, someone cannot come after all your other assets. As a passive investor or limited partner in a syndicated multi-family investment, your assets are not at risk--the only money that is at risk is the amount of money you have invested in that particular deal.  This should be clearly identified in the operating agreement for the syndication.  Therefore, I do not believe there is any value to creating an alternative LLC simply for passive real estate investing--you are fine just going through your own name or through the LLC you already have.  Creating an alternative LLC just for passive just adds expense as you have to file taxes for that entity, etc. 

Hello BP. I'm looking for help finding a mid-term rental co-host agreement template.

Backstory: I recently co-sponsored a 10 unit apartment syndication in San Antonio, TX. Part of the value add strategy is to covert a number of the units to mid term rentals (30 days or more) as San Antonio has become more strict on STRs. I am wondering if anyone here has a co-hosting contract they could share. The basics are I would rent a number of units from the syndication LLC, would be responsible for management and expenses (ie utilities), and then I would keep a portion of the profit (basically my upside for managing the mid term rental units) and the other portion of the profit would go to the syndication LLC which now gets over market rent. I could also just do a straight arbitrage/master lease but prefer the co-host model as I see it as more equitable and disperses risk and reward more evenly between myself as the co-host and the syndication LLC as the property owner. If anyone has done this and would be willing to share lessons and agreement documents, I'd really appreciate it.

Hey @Christian Olivo.   I'm a military guy with 7 properties in 4 states.  I started with management companies and now self-manage all my properties with the exception of one because I think it is really just so easy to do it yourself with all the tools and systems available to quickly screen tenants.  #1 most important is to find the right tenant and the rest becomes pretty simple.  Heather and Brandon Turner's book on Managing Rental Properties is great.  I use Transunion SmartMove to do background checks--you can have the applicants pay the fee so it is free to you.  I also use a free Survio survey tool for applicants to answer (what is your credit score, how much to you make, etc) to prescreen and cut down on how many people you have to show the property to.

Best of luck.

Mel

Thanks @Colin Smith. Went with Vectra Bank. Gave 80% LTV and no origination fee and 10 year term. First bank was only offering 3 year term for rental properties and had a 1% origination fee. Appreciate the referral. Mel

My man @Anthony Green-Parker!  I just did this with a duplex property in Corpus.   First thing I learned was that in Texas you don't draw up a new lease...the lease the current tenants are under essentially continues to remain in effect.   Under most circumstances, I want rents paid via electronic means.  With the renters I've just inherited, one pays half the rent every two weeks and she typically paid in cash with the previous property manager picking the rent up.  So, I find myself trying to figure out how to make it work.  I also have some repairs I want to do on the property and it is likely going to cost me to put the tenants up for a couple days while the work is done.  Other than that, I'm happy that that I've already got paying tenants but it is a risk.  In this case, I knew the renters were up to date on the rent when I purchased the property.  I probably should have asked to see their individual leases earlier in the process.

@Suresh Kannan, I don't think you need a property manager but you probably have to have some boots on ground to handle the showings and provide keys to tenants, etc.  One of the things we did for tenant screening was to use a free pre-screening questionnaire via Survio.com which allowed us to qualify tenants quickly prior to showings.  We recently had a property on the market for 7 days.  We got something like 67 inquiries requesting applications or viewings but based on the pre-screening questionnaire we only qualified 4 people for showings.  That will reduce the workload on your boots on the ground person and make things easier for you if you choose not to have a property manager.

Mel

@Anthony Green-Parker, welcome to San Antonio real estate investing and best of luck with the BRRRR method! I'm Air Force--currently in California but investing with a partner in San Antonio. Reach out anytime if you need any advice. What areas to target, finding deals, MLS or wholesalers or cold calling or door knocking, contractors, rehab, lenders, property manager or self managed, establishing systems, tenant screening... Could seem so daunting but you can definitely do it. One step at a time...congrats on deciding to be an RE investor.

Mel

Thanks @Colin Smith.  I'll look into First Bank.

Hello CSprings Forum, I'm looking for a referral for local or national bank that will give HELOCs on rental properties. We have a place in Monument with some decent equity and would like to get a HELOC to purchase other properties. Most of the national banks I've looked into don't offer very good rates or lend at lower LTV if it is a rental property. Thanks for the help!

Mel