All Forum Posts by: Noah Wright

Hey Mark,

Great question. It depends. The same way a home's value is appraised, there's an appraisal process for the rental income. So you value the asset, and you value the cashflow. Some lenders are going to want 2-6 months of lease history before lending, others can lend with just a market-rent estimate, others don't even need to show positive cashflow.

Ultimately every borrower is unique, every property is unique, and therefore every transaction is unique. I'd be happy to review specific transactions with you anytime --

Hey there!

Congrats on getting the offer accepted, and it's awesome you're thinking ahead about structuring the ownership in an LLC. You've got the right idea when it comes to liability protection and separating the income for tax purposes, but there are a few things to consider with the "due on sale" clause.

When it comes to paying the down payment, it's perfectly fine to use your personal account to cover it since you're personally guaranteeing the loan anyway. After closing, you can transfer the deed to the LLC, but the key is timing. Lenders sometimes don't mind if you transfer it to an LLC after a few months, especially if you're still making the payments personally. But be cautious, you could check with your lender directly to avoid triggering any concerns.

As for waiting a few months before transferring the deed, it's often recommended just to avoid drawing any immediate attention to the transfer, but every lender is different. If you move forward, make sure the LLC is properly set up and operating as a business—especially when it comes to collecting rent and paying the mortgage.

Lastly, about taxes—transferring ownership won't necessarily keep the income off your personal return if you're a single-member LLC, as it's considered a disregarded entity. But it could still provide better organization and protection. Working with a CPA on your tax strategy will definitely help ensure you're getting the benefits you're after.

Good luck with the closing! Feel free to reach out if you need anything else.

My golden rule is to answer every phone call and tell the truth. Don't need to know everything, but need to be responsive, find good answers and provide results.

Unison's co-founders:

https://www.linkedin.com/in/james-riccitelli-64187466/
Current: https://Unlock.com/

https://www.crunchbase.com/person/michael-choupak
Current: https://www.stork.ai/

https://www.linkedin.com/in/rurikbradbury/
Current: https://www.limborevolution.com

If they're looking for $10,000 seed money and you have $10,000,000 sitting around - plus the due diligence checks out (legitimate opportunity) - that's relatively low risk for a good upshot.

If they're looking for $50,000 seed money and you have $75,000 liquid, absolutely not.

Personal financial position, coupled with due diligence, are important. Underwrite the opportunity like a bank, show me receipts, etc... I'd want to meet the person over zoom if not in person. Find character references for them after the meeting. I'm not investing based on an email. Good opportunities, early stage opportunities, may not have the best online presence, but be otherwise legitimate.

Also IRR is a vanity metric, it's the wrong measurement. Cash on cash return is what I'm looking for.

How do you eat an elephant? One bite at a time... 

The "fast lane" is to look at fixer-uppers, upgrading a distressed property is going to multiply your return on investment quickly. More risk and work involved. If you have the time and energy to do the renovations, and want to "sprint" to financial freedom, go that route.

The "slow lane" is to look for immediate cashflow properties, less risk and less work involved. If you are thin on time and looking for more passive income, go that route.

I think this is the first decision you need to make. Both options have pros and cons.

Mortgage fraud is investigated by the FBI and punishable by up to 30 years in prison and/or a fine of $1,000,000 --- (link)

Bryan, there are perfectly legal solutions to your problem, call anytime.

David, you've brought up a great point, and it's something many seasoned investors run into when they start screening multifamily and commercial deals. Sellers and agents often inflate prices based on potential income, but like you said, you want to base your investment on what's actually being produced right now. It makes sense to be cautious of paying for projections rather than the current reality, especially when you're the one who'll need to take on the risk and effort to achieve that potential.

When it comes to negotiating, I think it's about finding a balance. The seller will naturally want the highest price possible, and their agent is likely to push that "potential" value hard. Your job is to bring the conversation back to the current, real-world numbers—actual income, actual expenses, and actual cash flow. Sometimes, early due diligence can help set the stage. If you approach it with a mindset of establishing facts upfront, you can sidestep a lot of the fluff. Asking for detailed financials—especially rolling 12 months' data—can really help you determine what’s realistic.

Think like a bank. Bank wants proof and records. We are not investing in tech startups here.

In negotiations, you might not always get down to the exact current income value, but by anchoring your offer on the facts, you can often pull the seller closer to a realistic middle ground. The goal is to make sure you’re not overpaying for "what could be" while staying grounded in "what is."

I've helped a lot of people consolidate debt and get into better financial positions. Happy to spend some time with you free of charge, feel free to call anytime, friend

Thanks for chiming in, Drew! It sounds like you're doing great research ahead of your first flip. Yes, it's crucial to get the right structure in place—setting up an LLC in the state where you're operating can offer liability protection. And consulting with a local attorney to ensure compliance with state-specific real estate laws, plus making sure you have the necessary permits, is a smart move.

As you start, also look into state-specific rules regarding contractors and renovations, especially if you plan to flip in different states from where you reside. Best of luck on your 2025 goal—sounds like you’re on a great path!

What locations are on your radar?