All Forum Posts by: Nathan Waters

@Jay Hinrichs

So you use a title company instead of an attorney? I have a working relationship with both here in Illinois. I already contacted my attorney regarding this and he said its easy to do. But I have not contacted my title peeps yet. 

@Jay Hinrichs

Thanks for the response. How do I ensure the investors are protected? I want to reassure them that they have a secure investment.

I have a few investors interested in putting money up for my next property. This is the midwest so its not a huge sum (30-40K) I am having my lawyer draft up a promissory note to have two investors put in 15K - 20K each. The money will be secured by one of my houses that has equity and cashflow. So the money isn't tied to any future project. Do I need any other proffessionals to help with this? An accountant for INT statements or anything? I'm trying to ensure that I'm covering my bases without over complicating things. 

One of the investors is considering establishing an LLC to invest with instead of using his own name. Any ideas on that? I know it doesn't impact me, but I was wondering for his sake if its worth his while.

I have friends that are investors that I won't partner with because I can see issues coming up before we get started. They are still friends but I think that it would make the relationship worse if you continue to invest and butt heads as oppose to parting ways on the business side. Don't inhibit your own growth on account of someone elses issues.

@Celeste Byrd

Have you looked up county records to find the owner of the property? I'm sure the landlord can help with this situation. Better to let them in on whats going on. If you can't find it, ask a title company to look it up for you.

@Edgar Figueroa

Its a limited liability corporation. Its not needed to get started and you shouldn't let it hinder you from starting. Once you have a few properties, its worth consulting with your attorney and tax advisor to see if its worth establishing one. I didn't have one initially but now I am moving everything into my LLC. It has some benefits to protect your personal assets. I would listen to some of the podcasts that have more in depth discussion or do some searches on here. This topic has been discussed in pretty great detail.

Depends on the taxes and terms of the loan. But probably not. It would be nice to know that everything is brand new and would be relatively easy to calculate capex. But you're not even breaking 1%. Where I am at, that doesn't meet my criteria. From my understanding, construction loans are not exactly cheap either. You have to have a good down payment, correct? What is the actual value of the duplexes? Are you buying with some equity? If you are experienced with construction and can get the building with a decent amount of equity, that might skew my opinion slightly. 

Is it possible to get a second lien on it? I know its not typical to have a home equity loan on an investment property. But look into private investors with a promissary note. This will mitigate the higher interest rate on the entire balance. Plus the commercial loan is likely only a 5 year baloon. You might want to keep the 30 year fixed.

Mine has not. But when a lender asks for your pay stubs, it will show up on there. I have heard other people say that lenders will count it against your debt to income ratio. My lender has never taken it into consideration.

 This is the approach I used when moving to a new state 8 years ago. I rented for 2 years and ended up using that broker for everything I have done in real estate since then.