All Forum Posts by: Account Closed

Could you clarify this statement? Is your interest level in Baltimore just personal (don't like snow or something?) or is it hinged on your perceived financial prospects of RE investment performance in Baltimore? You always go with where you get the most bang for your buck on a risk adjusted basis and may very well mean looking outside where you reside (or not) based on what the facts are.

 Are you suspicious of the seller's figures?

On an average deal, using median housing price in the US for instance (and depending on where you are investing), net of $28,000-$30,000K is feasible per flip deal. If you did two flips about $56,000 per year, $84,000 for three etc. What is your opportunity cost? Waiting isn't without it's risk. There are always unforeseen events that could create new liabilities, income variances or hit to your debt-to-income (DTI) ratio... depending on the strategy or capital structure, some might say DTI is irrelevant all together.

Which markets are you looking into? The cap rate doesn't usually reflect the rate of attainable yearly price growth in the value of the rental property which often explains why a rational investor may often invest in some lower cap rentals.

Absent of there being specific language in the applicable statute on how to deal with this, you can think of it this way: if you offered an 8% discount but only to customers that stayed for a period > 30 days (and a lower or no discount if for a lesser period), when would you apply the 8% discount on customer purchases? Initially when the customer booked for 7 days or subsequently when they extended the stay beyond 30 days? 

What if they only exceeded the 30 day threshold only if you counted the initial 7 day stay? Do you retroactively apply the discount or do you treat each as distinctly different transactions in order to determine eligibility for the higher discount? That would determine how/when to compute taxes due.

You want to be very careful though, when you start talking about "rolling the whole thing into rent and don't specify the taxes", that can be dangerous based on what the relevant statute specifically dictates in your state. Consumers and regulators generally frown at undisclosed fees and taxes.

Assuming you were attempting to engage in a legal activity (based on TN RE laws), it makes sense to incorporate where the transactions occur as that is the jurisdiction with the interest of levying and collecting tax. If you also do business in Mississippi (or may in the future), it may make sense to incorporate where you reside although you would still need to register in TN as a 'Foreign LLC' or entity doing business in TN.

Although the frustration is understood, the feeling that government often tries to zealously overregulate every nook of society (and may be true in some cases), real estate transactions for many consumers is quite significant a transaction. The level of consumer abuse and fraud would be unfathomably high if there were no licensing requirement for agents and brokers.

You essentially are describing the supply of capital to the LLC. It is not a gift per se but an investment in the LLC. The LLC essentially owes you the invested funds. On the balance sheet, this would be reflected in the owners equity balance.

You probably want to have a way of depositing funds into the LLC without having to utilize a personal bank account to perform a direct transfer.

If truck drivers are getting mugged and robbed for the cargo they are transporting, does the driverless truck/car manufacturers have a way to address cargo security issues? Are goods supposed to be more secure without a human (the driver) in the truck or isn't the cargo more exposed to being attacked? It seems like insurance premiums may go through the roof if importing or exporting expensive cargo by ground to/from Mexico or Canada.

In finance generally, the rate of return can be in some ways personal or can vary per investor. Some of the factors that may have an effect on the expected rate may include: the opportunity cost (what you can earn on the funds if you invested elsewhere or in a different asset class), what other investors earn by investing in similar projects (you can for instance examine the financial report of homebuilders to get a sense of what the margins might be), the cost of funds (are you borrowing to invest or utilizing savings), your target profit margin etc. These could all affect what rate of return an investor expects. By the way, when you say "..it looks like it will work...", what are you basing this on? Instinct?