All Forum Posts by: Pedro Martins

@Mindy Jensen, I have a contract to purchase a really tall metal structure in the middle of Paris - All I need is a small 10% loan!

(I just wanted to share something that folks can smile about)

@Shiloh Lundahl I know of several newbies that would take the deal you are offering which is really a loan deal at an ok rate (below HMLs), with the added benefit of some learning and networking.

On the other hand, I also know a lot of newbies that may be newbies in practical experience but have educated themselves very well and look at that and think - "so, you make 30% profit and you're offering me 10%? Why don't you let me put in my money as an equity partner instead of as a loan?" 

I am not saying that either way is better or smarter, but I think that many people are using the "entitlement" badge too much whenever they don't get their way... (and ironically, that is also being entitled!!!)

@Mark Silberman, I am not an accountant so take my advice with a grain of salt.

I do not believe that what you are describing is possible. splitting the properties between you and your wife is not going to fly with the IRS. Do you normally file separately?

I would recommend for your wife to get the real estate professional designation, which means she would have to document her hours of work in that area (and pass the 50% and 750 hours test), so that the collective outcome of all your properties is looked at together (you have to actively make that selection when filing your taxes) - if you still have losses overall (even if they are just phantom depreciation or rollover losses), you would then be able to balance out those losses against your active income (of either of you).

Remember that the fact that your wife has a license is irrelevant for the RE professional designation - it is all about the time spent and the type of work done.

Do talk to a professional on this. and good luck!

George Frank I have been used to getting loans @ 4-5% on a 20yr amortization. Have you tried local banks or credit unions? 6-8% might be more adequate for repairs. If you weren't doing a lot of rehab now I would have said 8-10% You may be able to get a better deal for property management than 10% given your number of units.

@John Frank

without a lot of info, I would say:

- 4% vacancy seems low, specially in what I imagine are 1bed/1ba units, which tend to attract a more transient tenant.

- $20 electricity? if this is common area, I tend to use $100 per unit per year

- 6% interest rate seems high, particularly for a 15 yr

- even post-rehab, 4% seems low for repairs

- can you get financing for the rehab at the same time as purchase?

Hello BP colleagues,

Let me begin by stating that I am aware that this type of topic should be discussed with a real estate attorney before decisions are made, but I want some early guidance to further my research before that stage.

That said, I am having difficulty understanding the difference between doing a syndication deal and a partnership. I feel that I have a good knowledge about syndication from SEC regulations, to structure and fees - how is it then that I hear about deals described as 50/50 equity, one side brings money, the other brings sweat equity but I never see anything about this having to follow complex (and expensive) regulations and documentation?

Here is my situation - I have a 20-unit multifamily deal in hand with good cash-flow. My bank has agreed to loan me 80% and I have a friend that can provide the 20% + closing costs + initial reserves. My friend is not interested in a loan, he wants equity (and I don't blame him) - though his involvement would be limited to the startup capital. 

How do I structure this in terms of entities and what documentation is required? Preferably without having to fork over $10-15k for a PPM and in a way that taxation issues are easy to deal with (i.e. each of us only has to report on their 50% of the profits and has access to 50% of the depreciation deductions).

Thanks in advance for your suggestions!

Pedro 

@Manmath D., I am in Louisville and focusing on commercial multifamily investing. Feel free to message me if you want any information or just to discuss possibilities.

Hi everyone,

This is a post aimed at @Joshua Dorkin, @Brandon Turner and everyone that listened to the Grant Cardone Podcast from February 2015.

I have to say that at first I was not impressed by this guy, as I am not generally impressed by slick-haired, sales focused used car salesmen... But one simple nugget changed my mind and made me listen and re-listen.

For anyone that didn't catch it, he said (back in 2/5/15), and I paraphrase:

"Having half the country hate on you is a very powerful thing, if half the country hates you, you can become president!"

How fantastically insightful is that????

Note: this is not a political post, it is simply highlighting something that I thought was brilliant. let me know if you agree!

For that great quality of interior you have a lot of upside in that rent - no wonder the tenant is so happy, he has a bargain! 

@Ali Khalaf It sounds like what you are really looking for is a turnkey provider. This way, all the rehab is done (and in a way to tenant-proof the property), there is an existing tenant and the property manager is in place. All you need to do is pay for the house and receive the cash-flow.

And if you decide to use the power of leverage later, there is always the possibility to refinance to buy a second, third etc...

You should contact @Erik Hitzelberger - his business model fits what you are looking for.

Good luck!