All Forum Posts by: Michael Douglas Christensen

@Chris Martin thanks for the input! That makes sense. Are there any specific websites that give employment / population trends by state that you know of?

What sites have people used to do a macro analysis and understand the area they're investing in? I would love to have a place to go to see reliable information about population and employment trends. Is anyone familiar with reputable sites for this information? 

Very interesting forum. I've noticed a lot of questions on this forum about business entities. I just finished reading "Start Your Own Corporation" by Garrett Sutton, esq. which I'd highly recommend for anyone interested in learning more about this. Cleared up a lot of questions I had about the legal aspect of REI and business in general. As @Dave B. alluded to, there are some benefits from setting up an entity in Wyoming and Nevada if you're very serious about asset protection which is discussed a lot more in the book.

@Shawn M. Yeah I have a friend that I've partnered with on a separate business and he is a GC. I know nothing about rehabbing and he has a lot of experience with that so we set up a 50/50 agreement. I will oversee acquisition and he knows how to rehab. An investor from a previous business venture has tentatively agreed to give us $ for a 7% ROI. We'll use private capital at 7% to purchase and rehab properties and we'll partner with property management. In order to give our investor a 7% ROI we will likely have to purchase out of state if we are going to do rentals. Anyway, as they say, getting part of the deal is better than no deal. I'm just not comfortable doing all the aspects of the investing so I decided to partner with a GC. We're still in the process of getting our first deal.

@Anthony Hurlburt @Shaun Vembutty

Thanks for the responses! Interesting you both suggest LegalZoom. I will definitely have to check it out. Thanks again!

Hey BiggerPockets! 

I'm about to set up the operating agreement within an LLC and was wondering if any investors in Utah have done this on their own? Would you recommend I ask a lawyer do this for me? If so, what law firms specialize in real estate and would do a good job? How much should I expect to pay a lawyer for doing this? Thanks in advance!

@Sam Newell

Thanks for the response and the support! I'd love to learn and hear any advice you have to share! I'd also be interested getting in touch with the client. I'll send you a PM! 

@Amy Kendall @William Hochstedler

Thanks for the responses! Very insightful and helpful! 

I met with my friend yesterday and we had a good conversation. With your help I was able to set out a plan similar to my original post, but with slightly more realistic numbers as you all suggested.

We will be looking for properties that we can acquire and fully rehab for $140,000 or less. With a 30% sweat equity position in the property we'll be able to get into that $175,000-$200,000 ARV range. Depending on the expenses I'm estimating we can afford private financing up to about 5.5-7%. As long as the deal is cash flow positive after all expenses and debt service we'll pursue the opportunity.

It's comforting to hear about the experiences you all had during the 2008 crisis. Sounds like a 30% equity position in a fully rehabbed property is a very wise and safe investment. 

In the next two-three weeks we will be setting up an LLC, a bank account, a website, and approaching three private investors with a presentation we've been working on. We came up with a good plan so I'm hoping we can get a property in the next 2-3 months. I'll keep you all posted.

Thanks again for the advice!

@Rebecca Belnap

Good to know. So the idea is the more equity you have in a non-owner occupied the lower the interest payments? I'm planning on having a 30% sweat equity position in the property after rehab. Would this be as low as 4% or should I still plan on 4.5% with this position?

Do you think it would be conservative to estimate 40% for expenses on a freshly rehabbed property then?

Thanks!

@Shawn Ackerman

I haven't yet no. I have been researching out of state investing quite a bit, but I just don't know anyone in the Milwuakee area so it felt a little overwhelming. 

I've been studying my backyard more and am likely going to partner with a friend who is a GC in Utah. We're meeting tomorrow and hoping to start a BRRRR-based approach. I recognize the cash flow isn't as good but the other 3 wealth generators can still be quite powerful as long as the property isn't cash flow negative.

After I get my feet wet in Utah I would strongly consider out of state investing. Milwuakee still seems like a great place to invest for high cash flowing properties.