All Forum Posts by: Pearce G.

@Shiloh Lundahl I'm not an attorney, but I'm really curious to see what an attorney says.  Assuming the documents in your post were all properly executed, it seems like you stand to receive your investment back regardless of the sale price...even if the properties sell for less than the amount you put in!

Knowing that he has to make you whole, the investor may be unwilling to reduce the price to a level that will generate more traffic, because he knows he will take a loss. May be worth a conversation between the two of you about pricing strategy. If it's not going to sell at the expected ARV, you may need to negotiate some mutual concessions in order to get out of the deal and minimize your losses.

Before sending any more money, however, make sure both parties are clear in writing that upon any sale at any price, you get 100% of your money back including additional "investor monies".

May not be a bad person...just doesn't know how to forecast ARV.

@Ulises Becerra does that mean you bought it for cash?  Or have you improved the value and now looking to refi at more than the purchase price?

Is the $1100/mo income net or gross?

If this is your only income, you may need a spouse's income or some other co-signer.

Most lenders also want 6-12 months of "seasoning" before refinancing a rental property.  It may help that you are inheriting long term tenants.  Go meet with a couple of lenders and let them know what you're doing, your objectives, etc. and get their guidance on what it will take to qualify.

Closed on my first investment property on my 55th birthday after 30+ years as a life science entrepreneur.  Having lots of fun, but kicking myself for not starting sooner...when my income statement was stronger than my balance sheet instead of vice versa.  On a pace to acquire two buy/hold properties per year in a tight market.

Secondary objective is to teach my college-age kids to start REI while they're still young enough to house hack. So far, they just think I've joined a cult. =)

Until the bots kill us all, we still need a place to live.  AI might trim margins by making markets more efficient, but as long as humans are allowed to own real property, there is money to be made from buying it, selling it, renting it, financing it, etc.  

Now...I know a cute little bungalow with a moat and a drawbridge that would be just perfect!

@Patrick Wheeler I agree with @Jay Hinrichs.

If you went in expecting and agreeing to 10%...and that's what you're getting...where's the problem?

Rather than involving lawyers (and I'm not one) there may be a semi-diplomatic option. If each of you own a third of the LLC, any two represent a majority. If you can recruit just one of the others to see it your way, you may be able to negotiate something above 10%.

You only mentioned that it was for "a couple properties", so I don't know if this is a dispute over thousands, hundreds of thousands, or millions of dollars.  Assuming the dollars are relatively modest, take your lumps.  Hopefully, your 10% share exceeds your 40% cash contribution, but if it doesn't, you just bought some education.  We've all done it.

@Matt Rosenbohm  Similar to @Kevin Grinstead and @Louis L. comments on lifestyle, I would ask What part of real estate is the most fun and satisfying to you?  Do you like managing a buy/hold portfolio?  Fix and flip?  Hard money lending?

Rather than maximizing return, what would give you the most personal satisfaction?  Once you answer that question, you have the luxury of structuring your portfolio accordingly.

@Jason Allen 

I think you are talking about the Certificate of Tax Compliance for the seller's LLC. I just went through this on the seller side. The closing attorney instructed me to obtain the Cert from the dept of revenue, because the property I am selling represents more than 50% of the LLC assets. I paid my $60, got the cert, and forwarded it to the attorney.

For unrelated reasons, however, the buyer wasn't ready to close, and I learned the cert is only good for 30 days.  Attorney told me to get another one.  I said ok, but not until we set a closing date.  I have another $60 cert now, and we are set to close next week.

Back to your question:  It is a legitimate issue.  Both times it took less than 10 days (I'm in SC), but your seller may be building in some buffer, or it may take a little longer in other states.  If your seller obtained the cert earlier, they might have had to repeat it like I did.

Good luck!

Is that enough diversification to obtain a line of credit against your portfolio?

What do you do when you are out of the country, in the hospital, or otherwise unavailable?   Do you tell the tenant to handle their own emergencies?  Do you continue to manage by phone and email?  Do you designate someone to cover for you?  If the latter, how do you compensate someone to stand in for a few days or weeks?

@Lue C.  Suppose that instead of having a paid off investment property worth 270K, you had 270K in cash.  Which option would you choose?  Would you buy the same house with its $400/mo cash flow?  Would you invest in syndicated deals?  Would you lend it to other homebuyers?  Or would you buy your own income properties?

Personally, I like the seller financing (with an attorney drawing up the paperwork, of course).  You can tailor the down payment, interest, and amortization schedule to fit both party's needs.  And you don't have to pay the first 4% to somebody else.