All Forum Posts by: Account Closed

Today I closed on my 4th rental. This property is on the same street as another one I own. The property was listed for 34k and we ended up settling on 24k.

The property is approximately 800 sqft, 2 beds, 1 bath, hardwood floors, vinyl siding, newer windows, basement, no garage, and in a C+/B- neighborhood. The property needs paint throughout, some siding and gutter repair, insulation in attic, minor window trim repairs, flooring in one bedroom, yard clean up, basement clean up and painting.

Here are the breakdown on the numbers:

purchase price: 24k

closing costs: 1k

Repairs: 5k

Total Investment: 30k

Rent: $800/mo

Property Tax: $1,012

Insurance: $425

PM: $960 (10%)

Maint./Cap Ex: $960 (10%)

Vacancy: $768 (8%)

Total Expenses: $4,125

NOI: $5,475

COC Return: 18.25% or 16% coc return using 50% rule..

Its been rare to find properties this discounted around my area. The ARV on this house is probably around 50k. This property was owned by a landlord who was tired of renting it and was having a lot of issues with tenants. We plan to fix it up and turn it over to our property management company. Hoping we don't run into any surprises and the repairs stay at or below 5k.

Nice work!  Looks like you already made some good progress; looking forward to seeing this project come to completion.  

Nice buy, congrats!  

Thanks for the reply's guys.

So what needs to happen is the the weep holes should be exposed to allow for the water to get out?  And the bricks with the cracks should be replaced? And the cracked mortar removed and tuck pointed?  

I don't have a clue how much brick layers charge, may need to make some calls.

That makes sense.  I cant recall if there were weep holes or not, cant really see any from the pics I took either.  Sounds like it would be a good idea to contact a bricklayer to see how much it would be to seal up any joints to prevent any future water intrusion.

Appreciate the reply's.  I have been in the property and there was no signs of water damage or recent repair to the walls.  This property also has a basement and there were no visible cracks in the basement walls that I noticed.  Also, the roof on this house is older and probably towards the end of its life.  

here is a closer shot of a spot on the back of the house below the window sill.

I am looking at buying a foreclosure property.  The property looks good except I noticed some cracks in the exterior brick.  The cracks look like they have previously been filled.  The exterior walls look straight I am just wondering if this cracking is a sign of structural issues with the house and if I need to consult with a structural engineer or not.  

I just transferred a property that was paid off to an LLC using a quitclaim deed. This particular property is owned with a business partner, we simply filled out the quitclaim deed stating transfer from our personal names to the LLC, had it notarized, then filed it at the county.

As Kerry stated, a financed property is a different ball of wax.  If you have a mortgage on this property you may want to consult with the lender or a lawyer first.  There is a due on sale clause that technically could be triggered when transferring the property.  A due on sale clause stipulates that the lender can call the entire balance of the loan due in the event of a sale or transfer of the property.   

I have spoke with a few mortgage professionals about this and they have all said they have never actually heard of that happening when transferring the property from your name to an LLC you own. Their line of thinking is, if you are making the payments and in good standing there is no reason for them to call the note due. However, I would still do your due diligence on this first.

I have two rental properties that are owned with a business partner. We are wanting to transition these two properties into an LLC and are unsure about some of the specifics involved in doing so. We want to make sure we are fully protected.

We currently have an LLC established. The tenants make their checks payable to the LLC and we have a bank account set up in the LLC name. These 2 properties are currently owned under our personal names and have been rented for a several years now, we plan on holding these properties long term.

One of the houses is managed by a property management company and the other is managed by us (at some point will also be managed by a prop mgmt company). We do have a mortgage on one of the properties that is in our personal names. 

Here is the list of items that we plan to transfer to the LLC but wanted to get your thoughts on what we may be missing or if this should be structured differently.

Things we think we need to do:

-We are registered for an LLC already without an EIN.

-File for an EIN under our LLC name (Must file a partnership tax return as this can not be treated as a disregarded entity like a single member LLC)

-Deeds (Quit Claim Deed the properties to the LLC. Should there be any worry about the due on sale clause with the one mortgaged property?)

-Property (file property transfer affidavit with city transferring to the LLC)

-Move Insurance under LLC

-Bank Accounts under LLC

-Property Management Company (Sign new agreement under LLC name and have payments from property management company direct deposited to LLC bank account)

-Any utilities that need to be transferred from tenants name during vacancies be transferred to LLC and not personal names)

We've also read about using a trust as well but don't know much about it so any opinions are welcome.  If it comes down to it we will contact a lawyer but would like to see the opinions of some of the BP members as well.

Thanks for the help!