All Forum Posts by: Peter Lim

Hi BP Family,

Couple questions to get my head wrapped straight.

1. I intend to purchase a property using an LLC so I would have to collect funds and put them into that LLC.

2. I have funds from real estate activities/rental homes and want to do a down payment on another property. How do I do this? LLC A put funds into LLC B? LLC A pays me and then I put funds into LLC B?

3. If LLC A purchases a property or makes a down payment, is that amount deductable to LLC?

4. We use the CAPEX 5%, maintenance 5%, Vacancy 5%. At year end, when the CAPEX/Maintenance accounts are not used, are they added back to profit to be taxed as profit or can they be set aside in another account?

Thanks Steven for the fast reply.  How are these transactions  negotiated with sellers?

Do buyers always offer more than the mortgaged amount so sellers are able to leave with cash in their pocket? 

Is it ever possible to offer less than the mortgaged amount or a price that frees the seller but he leaves with no cash?

Hi BP Family, what happens to the amount a Seller owes on his mortgage?

a) Buyer must pay off the loan before acquiring the property? 

b) Bank allows Buyer to take over the mortgage?

For example:

After repairs Value = $150,000

Total Seller Mortgage Amount = $100,000

Seller Equity = $60,000

Amount Seller Owes the Bank = $40,000 <--- What happens to this amount?  

Wholesaler Purchase Price = $70,000

Rehabber Purchase Price = $80,000

Repairs Cost = $20,000

Hi BP Family,

Just listened to podcast #2, @Karen Rittenhouse. So helpful from W-2 starting out to finding deals, learning the revenue model, and expanding into holding long term rentals for retirement and paying those mortgages off.   

She mentioned forming trusts and other business entities to secure the assets for her children and beyond. Could others help with how this works? What are the entities used for holding multiple properties? Do investors use one holding company (LLC or C corp) to hold all of singular LLC properties? If used in this way can funds from one cash flowing property be used to make a repair in another one?

For trusts, how do investors control their properties but not own it or have properties placed on asset sheets?  Are trusts the only vehicles used for this? 

Does anyone have experience setting up a private foundation or other form of nonprofit used to direct funds to educating youth on investing or to provide funds to nonprofits? 

Are landlords required to LLC properties to take advantage of the 20% pass through deduction?

Can you link to AIRBNB comparables and how you calculated your vacancy percentage and estimated income? What is the minimum expected occupancy?  What is the current use of the property? The $30,000 repair costs would include what and do you have contractor estimates?  What would an investor in your deal get in return? Did your friend ever AIRBNB the house? 

HI Randall,

Can you go into more detail about the numbers? Did you use a bank loan to finance the renovations? How did you go about finding suitable tenants? Any advice on finding contractors? 

Hi Wayne, thanks for your response.  The appraisal came back and the lender is asking for things to be fixed before they can make the loan.  So this bank loan is out of question now.  How would I structure my parent loaning this amount to me?

Hi Bp! 

I am in the process of purchasing a foreclosed property.  I don't have all the funds needed to close.  My parent wants to lend to me.  How do I go about doing this?  I do intend to put the property into an llc after closing. 

Also, after repairing the home and reaching a higher appraised value, are there any restrictions on a cash out refinance since all of the funds did not come from me?  Has anyone done this please let me know what you suggest.