All Forum Posts by: Michael Lewis Lee

Hello Brian!  Yes, you are right.  A  purchase agreement should be in your access.  Do not tell the owner/seller about the possible assignment.  The demand in that area will determine if it would be a good purchase. before you go, check on area sales comps to help you determine your range of a sales price.  The demand in that area will help determine your Due Diligence period before you set a closing date and their motivation.  His attitude will help your decision whether you can tell them or not or if to close it twice on the same day and have those 2 expenses. Whether it is a sale or rental unit might be determined by the demand in that area as well as help you on the needed repairs.  Ask about any expected capital or major expenses.  If it is a rental ask them for a copy of the lease, if one exists.  If it is a sale, does it have curb appeal?   Its amenities will possibly help you determine on a sale or lease. 

 Good luck to you!

Hello Shakir! The allowable lender makes that decision. It's not determined by an official law or a "legal" situation. If you are paying cash, that would be determined by the seller/owner but they don't really care. Of course it usually is not allowed by a Bank. Private lenders, Hard Money Lenders, a "subject to", an Lease Option, or a Private Lender don't usually care how you do the ownership. but most of those require some cash in the deal or "sweat equity" as a safety factor for them. I would recommend a LLC. There is usually no downfall, it is usually determined by a tax consultant that will help you with the way that is best of your overall income and expense situation. Good luck to you!

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Hello Chris!  It depends on the  City Building Code.  Otherwise, it must be  officially done by the City.  It's possible that you can officially rezone it at the City.  The zoning designation determines what you can do and not do.   The only chance you probably can change it from residential use to commercial use would be the actual commercial proximity. Good luck to you!

Hello Jorge!  When it's  signed.  Good luck to you!

Hello Ian!  I would not rely on news stories from the TV or radio.  I would rather check with an area successful Realtor, a business based Community Association in that area, local real estate clubs, BBB workers that have been there for a number of years.  Local Community job or population group Associations. Real Estate Associations locally.  I hope this helps.  Good luck to you!

Hello Josh!  There is many things you should be informed on.  The demand overall in that area, especially population and job growth in the area then to rent or sell.  Also, you should consider the tax ramification.  12 months is the main time to consider ordinary income (which is more on short term ownership) or passive income ( which is usually a more long term ownership) which is taxed lower. Nearby sales comps will tell you what that house might be worth.  Use sales comps that are about 6 months or less.  The number of comps will also tell you about the demand in that area.  Pick an area that has good and frequent sales and do not worry about the competition.   Nearby retail development, especially big employers like hospitals and manufacturers and does the area retail commercial development fit your intention like for low income, middle class, or high class and does it fit your plans.  The area curb appeal, rating of the nearby schools, and the existence of nearby public transportation and a nearby stop for it.  The parking location and its type.  The nearby sales or rentals on the market going to mean more competition?  Does it have the most popular floor plan (like 3/2), if not can you add a bathroom without more slab?  Can you increase the value by adding something that would be on average in that area.  I probably missed a thing or two that should be considered.  Is that property within a mile from your nearest highway?  Is your site very accessive?  Good luck to you!

Hello Fernando! The one bad thing is the taxes that will normally be higher when doing a fix and flip. With a BRRRR it is usually held for more than 12 months and have a lower tax charge when it is considered passive income. neither will matter if you file a 1031. You could consider the owner financing, or sell as "subject to", or a lease option, and advertise for their sale with "no bank involved" and make more money. You can charge a little more because the buyer may have already been turned down by a bank. Good luck!

Hello again Jason!  I wasn't quite finished.  Be comfortable with demand for your rental house before you refi.  As pong as you have positive cash flow there's nothing wrong with debt.  You might want to spend any refi somewhere else if you have a decent cash flow.  Just pay down on any debt that needs to be eliminated that has a higher rate or you can't deduct.

Hello Jason!  There are several things to consider.  Is the rental interest rate higher or lower than your house?  Will you still have a positive cash flow on the rental when you refinance?  You can pay down your house loan that is part of refi loan with a possible lower interest rate than you're currently paying and will not have a no much larger payment that you may not he a able to afford.  I do lynot know if the rule is by ppppppppState, you can only retirement at an 80% of total value 

Hello Danny!  Look and ask about things that would be a major cost.  Like the roof, A/C, type of electrical wiring, water heaters, garage existence and attached or detached, fencing, windows,  flooring type throughout, concrete slab or pier and beam foundation.  Of course use an experienced inspector with that as a way to delete your contract. The condition of the kitchen and bathrooms, outside concrete work and the condition of a possible front porch, exterior brick or siding repairs, is the exterior landscaping OK, closet space, any drywall repairs or painting. Does it need replacement now or later(age).  New or old electrical main box and does it meet current code.  Smoke detectors.  Is Building Inspection people know of any known problems?  Does it have curb appeal?  I probably left some things out.  The bottom line is the overall condition, especially near term repairs and soon to be made. Good luck!