All Forum Posts by: Michael Conte

My partner and I closed on our first 3 rental properties between March 15th and April 27th. All 3 properties were purchased with cash and placed in our LLC. We have not been able to find a lender that will cash out refi to an LLC held property. At best we have been recommended to put the properties into our names and then after refi put the properties back in the LLC. I believe that would defeat the whole purpose of the llc (pierce the corporate veil)? This was never mentioned in any of our research the difficulty of finding a lender on LLC held properties. We are starting to wish we just put them in our names. Last night i made a list of zillows top 50 customer rated lenders for my local area and i have called all 50 today with zero luck. I would appreciate any and all input! We currently have 2 more deals waiting for us to buy but all of our money is wrapped up in the 3 properties. We are hoping to find a lender that will let us refi with property held in LLC and a 75% LTV. Property details below

Property 1

110k purchase price 39k rehab 200k ARV 1850 rent

Property 2

57k purchase price No Rehab (inherited tenants) 80k ARV 1100 rent

Property 3

95k purchase price 16k rehab 150k ARV 1650 projected rent (~2 weeks of work left before ready to rent)

@Maryann Houde how do you go about renting to travel nurses? Do you reach out to the local hospital directly and let them know you have a rental available?

@Nathan G. Thanks for the feedback. From the sounds of it there was initially a signed lease that no one has possession of so I believe that would leave them to be month to month

Hoping to get some advice to help a friend

She inherited a rental property from her late parents. As of august the tenants are behind atleast 5k in rent. Tenants have been occupying the property for over 10 years. I walked the property today and its not in terrible condition but the tenants are definitely subletting as there are far more beds than people who are supposed to be living there. she believes the tenants are undocumented. property is in nj. 

I would love to help her get them out and rehab the property as they are currently leased at $1500 of which they dont always pay and the market for her house is $2800. Since she owns the property out right, that $2800 would be a cash cow and nice back up retirement plan. 

I tried to gather as much info as i could but if any further details are needed for a potential resolution i can get them from her. 

any and all input is appreciated!

Thank you for the clarification. That is what my understanding of it was but like i said my lawyer got in my ear about needing the additional paperwork which he would be charging 750 + filing fees so i am assuming he was just trying to upsell me as this is my first property and dont have any experience. 

I have purchased my first BRRRR property with private money provided by my mom. I am not sure which documents are needed in order for her to only be taxed on the interest she receives and not the principal payback. I may just be overthinking this. My lawyer and her CPA (who admittedly has no experience with this) both claim that a promissory note and a filed mortgage/deed of trust are needed for her to be properly taxed only on the interest she receives. Speaking with other experienced investors I have been told that only a promissory note is needed. If anyone could give personal experiences/insight it would be greatly appreciated. Being tax season, I haven't had any luck reaching out to other CPAs with how this should be done.

Other helpful info: Located in New Jersey. Property held in LLC. Principal and interest will all be paid back in a lump sum after cash out refi.

BONUS QUESTION: what kind of cash out refi rates have you gotten on LLC held properties?

@Michael Conte hmm there doesn't appear to be an edit feature but I should add that the property is being bought with cash from a private lender with no "due on sale" clauses

Hi everyone! Possibly a silly question but I am currently under contract for my first BRRRR and first REI period. I would like to hold the property in an LLC. Do I need to create the LLC prior to closing or just move it to an LLC before I refinance? Thanks in advance!

Little back ground first (its an odd scenario):

My friend's friend found his dream home. He is self employed (siding sub-contractor) and has been told he needs the following to get a loan:

1. Two years of federal income tax returns (personal and business)

2. A letter from a CPA verifying that he has been in business for at least two years

Following this upcoming tax season he will be qualified. (April-June 2021)

So he is looking for someone to buy the home and hold the note. 

How would i Structure this lease option assuming its a 330k house with 25% down and 4.25% interest over 20 years?

Also if there is someone who would be interested in holding the note feel free to let me know!

Although he should be eligible for a loan in April-June 2021 he has stating he is willing to lease for multiple years so it is worth while for whoever holds the note. 

@Eric Trostle Thanks for the info!

@Account Closed Do you do an LLC for each of your properties or do you group a few together?