All Forum Posts by: Michael Kiley

 How is it possible that this great quote has been on here for 24 hours and only ONE vote! Lol, I know I'm deep in this thread... And I like how you substituted "Retirement planning" too.

@Nick Sinur

Congratulations on your recent purchase and welcome aboard!

The world is being shortchanged because your passionate inner genius is afraid of something. My God, Quit that job!!

"Far and away the best prize that life has to offer is the chance to work hard at work worth doing." - Theodore Roosevelt 

"3 brick-layers were asked what they were doing.

The first one answered gruffly, 'I'm laying bricks!'

The second one replied, "I'm building a wall.'

But the third one said with enthusiasm and pride, "Who me? Why I'm building the world's most beautiful cathedral!'"

"People that say 'I'll be happy when...' will never be happy." -Me

Hi Brad,

The answer depends on how risk-averse you are and how much equity you have. This is one reason why many think that leveraged property is actually safer to own than property owned free and clear. Seeing you already carry extra liability on your single family homes, that may be enough. For me, I would only use an LLC if I were purchasing a much larger commercial property.

This has been my struggle for a very long time.  I'm passionate about the work but managing feels like a job so I usually follow my passion.

My advice to you is read Brandon Turner's "The Book on Managing Rental Properties" Chapter 12 deals with managing contractors. I also think that Paul Esajian's book "Real Estate Rehab Investing Bible" is great. It deals with the topic of management in great detail. I'd take lots of notes. Best of luck!

I've talked with many seasoned veterans who have never heard of this. I imagine you could have the construction money escrowed and have them write a check to your own construction company, thus raising the amount on the HUD, although I wonder if it would draw a red flag to a scrutinizing underwriter. I should say that I've yet to use this strategy as it's not a big deal for me to wait 6 months to finance the property but for someone who doesn't want to wait, this information could be gold!

I can't believe I just wasted 10 minutes trying to understand this thread. If I had a dumpster company in the Milwaukee area, I'd take that dumpster off your hands. What am I missing?

 Hey Mark,

Banks will require 6 months seasoning. It's a HUD requirement for loans that will be sold on the secondary market.

Hi Kyle,

It's a HUD requirement. If you're refinancing it, lenders will not be able to lend more than 100% of what is on your HUD statement before the seasoning period is up. After the seasoning, they will go off the appraisal.

From what I understand, here's a way around this requirement:

Suppose you buy a house for 50k and need to spend 25k on renovations. Pay the title company 75k and have them make payments to your contractors as the work is completed. If your house appraises for 120k after the rehab, lenders will give you 75% of the appraisal or 100% of the HUD, whichever is smaller. In this case, the HUD shows 75k and you would get all of your money back out if you structured it this way. I hope this makes sense. @Alexander Felice does a much better job explaining this in his podcast.